# NHR scheme advice required!



## mrsmrn (Dec 15, 2020)

Hi!
I was thinking about moving to Portugal as a freelance illustrator/concept artist and I was wondering if I can be eligible of NHR tax scheme? In the list of eligible professions there is stated, a “creative artist” which is kind of a vast term, however I am unsure if it is a fit for my case (I am mainly working with video game or film companies). Could you please confirm or refute it?
Thank you!


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## TonyJ1 (May 20, 2014)

Look at the codes under 265 under the European List of professions and see if your activities 'qualify'. The Portuguese list follows the European list and definitions of professions


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## orange1290 (Sep 15, 2019)

Just a quick question about NHR. I'm planning on buying a property in Portugal in 2021 but then plan to register for NHR in 2022. So, if I own a property in 2021, will that still allow me to apply for NHR in 2022 and start that status in that year? I won't be resident for tax purposes in 2021 (spend less than 183 days in Portugal).

Does owning a property in previous years interfere with the application for NHR in later years? I don't think it does but just want to make sure.


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## TonyJ1 (May 20, 2014)

orange1290 said:


> Just a quick question about NHR. I'm planning on buying a property in Portugal in 2021 but then plan to register for NHR in 2022. So, if I own a property in 2021, will that still allow me to apply for NHR in 2022 and start that status in that year? I won't be resident for tax purposes in 2021 (spend less than 183 days in Portugal).
> 
> Does owning a property in previous years interfere with the application for NHR in later years? I don't think it does but just want to make sure.


If the law is not changed, then no reason why you cannot apply. Keep in mind deadlines - if you become resident in 2022, you will have until 31 March 2023 to formalise the request for nhr status


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## orange1290 (Sep 15, 2019)

TonyJ1 said:


> If the law is not changed, then no reason why you cannot apply. Keep in mind deadlines - if you become resident in 2022, you will have until 31 March 2023 to formalise the request for nhr status


ok, so if that's the case I will be under NHR status from 2022 for tax purposes? 

Thanks for the reply


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## TonyJ1 (May 20, 2014)

orange1290 said:


> ok, so if that's the case I will be under NHR status from 2022 for tax purposes?
> 
> Thanks for the reply


You have to make a formal application - it is not automatic, and this is assuming that there are no changes to the tax laws.


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## orange1290 (Sep 15, 2019)

yes, I understand I have to make a formal application but if I do this before March 2023 and I have been living in Portugal more than 183 days in 2022, does the 2022 year come under NHR?


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## TonyJ1 (May 20, 2014)

orange1290 said:


> yes, I understand I have to make a formal application but if I do this before March 2023 and I have been living in Portugal more than 183 days in 2022, does the 2022 year come under NHR?


As soon as you register as tax resident, that makes you tax resident - 1 day is enough under PT law


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## Guifig (Jan 7, 2021)

Even if you only apply for the NHR in 2023, it will apply retroactively to the moment you became tax resident in Portugal


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## TonyJ1 (May 20, 2014)

If you become recident, you need to request the nhr status, at the very latest by the 31 March 2022 (wef 2021). No late requests are accepted ie you cannot request the nhr status in 2023


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## dancebert (Jun 4, 2015)

orange1290 said:


> Just a quick question about NHR. I'm planning on buying a property in Portugal in 2021 but then plan to register for NHR in 2022. So, if I own a property in 2021, will that still allow me to apply for NHR in 2022 and start that status in that year? I won't be resident for tax purposes in 2021 (spend less than 183 days in Portugal).


Short answer: if that property is a residence in which you intend to live, buying it makes you a tax resident.

It's unfortunate that so many believe the '183 days' definition of resident for tax purposes. It's not true, according to Portugal tax law and KPMG (one of the Big Four global professional services firms). Tax residency is determined by either of 2 ways.

The law says in Article 16 of CIRS (translated by Google Translate):
"1 - People who reside in Portuguese territory are those who, in the year to which their income relates:
a) There have been more than 183 days, consecutive or interpolated, in any 12-month period beginning or ending in the year in question;
b) Having stayed for a shorter period of time, there, on any given day of the period referred to in the preceding paragraph, have housing under conditions that suggest that they currently intend to maintain and occupy it as their habitual residence;"
...
"3 - Persons who fulfill the conditions provided for in paragraphs a) or b) of paragraph 1 become residents from the first day of the period of stay in Portuguese territory, except when they have been resident there on any day of the previous year, in which case they consider themselves to be residents in this territory since the first day of the year in which any of the conditions provided for in paragraph 1 are met."

http://info.portaldasfinancas.gov.p...codigos_tributarios/cirs_rep/Pages/irs16.aspx
Site is in Portuguese. Chrome browser translates.

KPMG agrees (dated Aug 2019):

"Residence rules
For the purposes of taxation, how is an individual defined as a resident of Portugal? An individual qualifies as resident for tax purposes in Portugal provided that one of the following conditions is met:
He/she spends more than 183 days – continuously or not – in the country/territory within a 12 month period beginning or ending in the relevant year, or
In case they spent less than 183 days herein, they have, at any time of the referred 12 month period, accommodation available in Portugal in conditions where it can be assumed that it is their intention to use it as a place of habitual residence or abode."

Income Tax


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## orange1290 (Sep 15, 2019)

Ok, thanks for the info. 

So how do 'holiday' homes work? How are they defined? The property I plan to buy will effectively be one of these for the first 2 years as I will stay maybe 4-5 months there each year for this period made up of several trips/periods.

"in conditions where it can be assumed that it is their intention to use it as a place of habitual residence or abode " 

How is this interpreted as this seems to be ambiguous/open to different interpretation?


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## TonyJ1 (May 20, 2014)

orange1290 said:


> Ok, thanks for the info.
> 
> So how do 'holiday' homes work? How are they defined? The property I plan to buy will effectively be one of these for the first 2 years as I will stay maybe 4-5 months there each year for this period made up of several trips/periods.
> 
> ...


If it is a holiday home - no problem. Make sure the tax registration reflects that fact - ie a foreign address and not the address of the PT property or another pt address


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## dancebert (Jun 4, 2015)

orange1290 said:


> How is this interpreted as this seems to be ambiguous/open to different interpretation?


My understanding is non-hotel accommodations are taxed as either owner residence, long term rental, short term rental, also called a “Alojamento Local”. I'm guessing a 'holiday home' would be an owner residence, but have no idea how Finanças decides if it's a habitual residence or abode. I'd ask a tax professional in an area with many holiday homes, e.g., the Algarve. I'm sure someone at Home - Fiscal & Expatriate Services in Portugal - Eurofinesco S.A. would know. Because they're free, I'd start with their property related publications at O. Portuguese Property - Fiscal & Expatriate Services in Portugal - Eurofinesco S.A.


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## dancebert (Jun 4, 2015)

orange1290 said:


> The property I plan to buy will effectively be one of these for the first 2 years as I will stay maybe 4-5 months there each year for this period made up of several trips/periods.


Then make sure the address associated with your NIF isn't a Portugal address.


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## orange1290 (Sep 15, 2019)

Thanks for the reply. 

If I wanted to buy a small car so I can have some form of transport on my visits, would this be possible if my NIF has a foreign address? I don't know yet what documents you need to purchase a car in Portugal. Basically can a non resident with a property (holiday home) buy, register and tax a Portuguese car?


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## hktoportugal (Feb 25, 2019)

TonyJ1 said:


> If it is a holiday home - no problem. Make sure the tax registration reflects that fact - ie a foreign address and not the address of the PT property or another pt address


I concur. I would also recommend you qualify your home as "secondary residence" for IMT purposes and not as a "residence principal". At least that is what we did when we bought our first property here while we were still residing outside Portugal to avoid the risk of being considered resident here (plus a NIF with foreign address and non residence status).


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## orange1290 (Sep 15, 2019)

Thanks for the comments.

When you registered your home as "secondary" residence, did you buy a car in Portugal and if so, was being a non-resident with a foreign NIF address any issues with that process or getting insurance for the car?


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