NHR status in Portugal can be renewed every 10 years to maintain tax advantages and exemptions. Compliance with renewal requirements and timely submission of documentation are crucial for extending NHR status.
No, the Non-Habitual Resident (NHR) status in Portugal cannot be extended beyond its initial period of 10 years. Once granted, the NHR status provides tax benefits for a fixed period, and this period is not renewable or extendable. Here’s how it works:
1. Fixed 10-Year Period
- Duration: NHR status is granted for a maximum of 10 consecutive years. This period begins from the year you become a tax resident in Portugal after applying for NHR status.
- Non-Renewable: Once the 10-year period expires, you cannot renew or extend the NHR status. After this period, you will be subject to the standard Portuguese tax regime.
2. Transition to Regular Tax Regime
- Post-NHR Taxation: After the 10-year NHR period ends, you will be taxed according to the regular Portuguese tax laws. This includes standard income tax rates on worldwide income, as well as any applicable social security contributions.
- Planning Ahead: It is advisable to plan for this transition well in advance, especially if you are relying on the tax benefits provided under the NHR regime. Consulting with a tax advisor can help you understand the implications and prepare for the change in tax status.
3. Impact on Family Members
- Family Members’ NHR Status: If family members also hold NHR status, their 10-year period is calculated individually based on when they became tax residents in Portugal. Each person’s NHR status will expire 10 years after their start date, and similarly, it cannot be extended.
Summary
NHR status in Portugal is limited to a non-renewable 10-year period. After this period, individuals will transition to the standard Portuguese tax regime, and it is essential to plan accordingly for this change.