By the end of 2023, NHR (non-habitual residency tax regime ended. But a new fiscal regime has been designed for the expats in Portugal: it is called TISRI (Tax Incentive for Scientific Research and Innovation).
What is it for?
TSRI is a new fiscal regime for expats targeting highly qualified workers that move to Portugal to live and work (locally).
In simple terms, TRSRI allows these highly qualified workers to be taxed in Portugal at a special Persona Income Tax (PIT) rate of 20% (plus Social Security) on employment or self-employment income earned for a period of 10 consecutive years (non-extendable).
Requisites
Taxpayers who wish to be under this regime must fulfill the following criteria:
| Requisits | Details | |
| 1. | Become a tax resident in Portugal starting in 2024. | Taxpayers can become a tax resident in Portugal either voluntarily (after securing an address and getting a residency visa or equivalent) or compulsorily (after living in Portugal for more than 183 days in any period of 12 months or establishing a habitual abode in Portugal). |
| 2. | Conduct one of the following eligible Scientific Research and Innovation activities every year (with no gap bigger than 6 months): | In order to be TSRI eligible, the taxpayer must be hired for one of the following highly qualified functions. |
| a. Teaching in higher education and scientific research, including scientific employment in entities, structures and networks dedicated to the production, dissemination and transmission of knowledge, integrated into the national science and technology system. | This mostly includes the employment of doctoral graduates or those who are part of the scientific research career, the career of university teaching staff or the career of polytechnic higher education teaching staff to carry out R&D activities. By definition – since the entity must be integrated into the national science and technology system – this should only include Portuguese entities. | |
| b. Employee or member of the governing bodies in entities recognized as technology and innovation centres. | These are entities dedicated to the production, dissemination and transmission of knowledge, oriented towards companies and the creation of economic value, contributing to the pursuit of public policy objectives. Technology and innovation centres need to have effective management and facilities in Portuguese territory and carry on business in Portugal. | |
| c. Qualified employee or member of the governing bodies of entities that are benefiting from a contractual tax incentive for productive investment. | These are companies that have signed a tax incentive contract with the Portuguese government as a trade-off for investing in the applications that are relevant to the strategic development of the national economy, to reduce regional asymmetries or to boost technological innovation and national scientific research, improving the environment or strengthening competitiveness and productive efficiency. Companies must be located in Portugal in terms of effective management and facilities and also carry on business in Portugal. | |
| d. Highly qualified professions, to be defined in a Ministerial Ordinance, developed in: | These are companies that either (i) have made tax relevant investments under RFAI (mainly technology) or (ii) have major exports in eligible industrial and services sectors.
While a new list of highly qualified professions is not issued, are still in use for determining the eligible industrial and services, the following list:
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| d.1. Companies that are benefiting (or have benefited in the last 5 years) from our tax regime to support investment (RFAI); | ||
| d.2. Eligible industrial and service companies which export (or have exported in the last 2 years) at least 50% of their turnover. | ||
| e. Qualified jobs and members of governing bodies, in entities that carry out economic activities recognized by AICEP, E. P. E., or by IAPMEI, I. P., as relevant to the national economy, namely attracting productive investment and reducing regional asymmetries. | We are still waiting to know which economic activities AICEP and IAPMEI (public entities that are responsible for various certifications for innovation and economic activity) will consider relevant. Those companies must have effective management and facilities in Portuguese territory and carry on business in Portugal. | |
| f. Research and development personnel, whose costs are eligible for the purposes of the system of tax incentives for R&D (SIFIDE); | These are companies that invest heavily in R&D in Portugal. | |
| g. Jobs and members of governing bodies in entities certified as startups. | This means companies that:
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| h. Jobs or other activities carried out by tax residents in the Azores and Madeira Autonomous Regions, under terms to be defined by regional legislative decree. | Authorities still needs to produce the legislation needed; for now, there are no information about what it will become. | |
| 3. | Not have been under the NHR tax regime in the past years. | Meaning that someone who had NHR in the past, left Portugal and now has come back, will not be considered for this TRSRI special regime. |
| 4. | The employer company cannot be deducting the salary expenses in the tax regime on investment (RFAI); | Meaning that the employer cannot be deducting the salary it pays through the tax regime to support investment (RFAI). So, the taxpayer needs to confirm this with his employer to make sure his TSRI will not be denied. |
| Tax Benefits | Details |
| Lower Personal Income Tax (PIT) rate on employment | 20% instead of the usual 14%-53% progressive rates |
| PIT exemption on most foreign income sources | All foreign income sources will be exempt (except offshore). This includes different sort of revenues, like employment, self-employment, capital income/gains, real estate income/gains. The most remarkable change in 2024, will be foreign pensions. They will be fully taxable in Portugal under normal progressive rates (14,5% to 53%). |
How to register?
TSRI registration is a process to be carried through different entities, according with the eligible Scientific Research and Innovation activity that will be selected.
What can we do?
We can provide assistance analysing your situation and, through our juridical experts, will assist you during registration process.