“The NHR is the best kept personal tax secret in Europe”
PRIVATE PENSIONS AND DIVIDENDS
The None-Habitual Tax Regime or NHR regime was introduced by Portugal in 2009 and is a step towards Madeira being a tax-free jurisdiction for individuals in receipt of qualifying non-resident income. The income that qualifies from NHR inclusion includes pensions, royalties, interest on savings, share dividends and company dividends. The outstanding NHR tax regime was introduced with the aim of attracting wealthy individuals, those with private pensions and company directors who receive dividend payments.
Business owners who wish to reside in Madeira
Without exception the single most attractive advantage of the NHR regime is for those who own a foreign business in their home country. Business owners can restructure their business formation and assets and receive their company payment dividends in Madeira, the dividend will be exempt of all personal taxes. A company owner with a regular overseas salary will also be subject to a full tax exemption, there will be Portuguese social security to pay on these salary payments. This is particularly attractive and easy for UK and some EU based business owners. Contact Robert Webb for more details.
Reduced personal income tax
The NHR should be considered as one of the best personal income tax options in Europe. The programme works on the principle of reduced personal income tax, in this regard it is the best option for low tax income allowing your pension, dividends and interest payments to increase your disposable income in Madeira substantially. Company owners who become tax residents can receive their company dividends entirely tax free inside the regime. The NHR alone is a good reason to make Madeira your future home, allowing you to be more tax efficient in your retirement and investments.
10 YEARS DURATION
The NHR enables those who become tax resident in Portugal to receive qualifying income, potentially tax free in Portugal and Madeira, provided that the income in the source country is liable to taxation in accordance with the applicable tax treaty. To benefit from this preferential regime is to become a Portuguese tax resident, in accordance with Portuguese tax law, plus not having before been a tax resident in Portugal in the previous five fiscal years. The NHR tax status lasts for the first 10 years of residence. A resident is defined as 183 days in Madeira per annum.
As with all tax and personal financial situations, we advise an early investigation to see if the income can qualify for tax exemption. Please contact Robert Webb directly for a brief conversation on +351 9666 77630. Please also download the 23-page PDF ‘The Complete Madeira Buyers Guide’ it’s a great read and answers many important questions about life on Madeira.
NHR also extends to include local professional income in salary form for certain valued work activities, those who qualify benefit from a flat tax rate of just 20%. The professional working objective of the regime has been to attract academically qualified individuals and their families to work and reside in Portugal and Madeira enhancing and educating the local workplace. Qualification comes from various areas including artistic, scientific, technical, teaching and the IT sector.