The State Budget for 2024

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Introduction

The article 236 of the State Budget Law for 2024 repealed the non-habitual resident regime.

However, transitional rules were approved that still allow access to the regime for taxpayers who become tax residents in 2024.

Application of the regime for individuals who become residents in 2023 or already hold the status.

The regime will continue to apply to taxpayers who:

  • are registered as non-habitual residents upon the entry into force of the law (January 1, 2024) and until the ten-year period stipulated in the regime expires;
  • as of December 31, 2023, meet the conditions for registration as non-habitual residents, i.e., holders of a valid residence permit as of that date, and must complete their registration by March 31, 2024.

Application of the regime for taxpayers who become tax residents in 2024.

The regime will continue to apply to taxpayers who become tax residents for fiscal purposes until December 31, 2024, and declare, for the purpose of their registration as non-habitual residents, that they have one of the following elements:

  • Promise or employment contract, promise or secondment agreement concluded until December 31, 2023, whose job duties are to be carried out in national territory;
  • Lease agreement or other contract granting the use or possession of real estate in Portuguese territory concluded until October 10, 2023;
  • Reservation contract or promise-to-purchase contract for the acquisition of a real right over property in Portuguese territory concluded until October 10, 2023;
  • Enrollment or registration for dependents in an educational institution domiciled in Portuguese territory, completed until October 10, 2023;
  • Valid residence visa or residence permit until December 31, 2023;
  • Procedure initiated until December 31, 2023, for the issuance of a residence visa or residence permit, with the competent authorities, in accordance with the current immigration legislation, namely through the scheduling request or effective scheduling for the submission of the residence visa or residence permit application, or through the submission of the application for the issuance of the residence visa or residence permit;
  • Or if they are a member of the household of the taxpayers referred to in the previous paragraphs.

Procedures for obtaining the status.

The taxpayer must request registration as a non-habitual resident electronically through the Tax Portal, subsequent to the act of registration as a resident in Portuguese territory, in accordance with the provisions of paragraph 10 of article 16 of the IRS Code, in the version prior to the amendment introduced by this law, with reference to the year in which they became a resident in that territory.

In cases where registration is made outside the deadline, taxation as a non-habitual resident takes effect from the year of registration, for the remaining period, until the end of the period provided for in paragraph 9 of article 16 of the IRS Code, in the version prior to the amendment introduced by the State Budget Law, counted from the year in which the individual became a resident in that territory.

Note that this wording contradicts the understanding that has been followed by the Tax Authority in the evaluation of requests submitted outside the deadline (usually rejected), and changes to this position are expected.

Abílio Sousa

Tax consultant and CEO of IVOJOMA.

Guest professor at Porto Business School.