Disclaimer: I’m not a certified tax consultant and you should always do your own research and consult a professional tax consultant. This post describes the NHR specificalities for the IRS declaration in Portugal and how to declare them in the IRS web interface. "Englobamento" (aggregation) vs autonomous tax rate Income that carries a final withholding tax (when sourced in Portugal), or that is subject to an autonomous tax (when it comes from ab…

What is the NHR (non-habitual resident) regime? NHR (non-habitual resident) is a tax regime that was created 2009 with the aim to attract talent in high value added activities to Portugal. The NHR regime comes with various tax benefits for a period of 10 years. Any EU/EEA/Swiss citizen or holder of a residence permit that has not been a tax resident of the country during the previous 5 years can become a NHR resident. The main tax advantages as …

Taxes on Personal Income Residents in Portugal are taxed on their worldwide income at progressive rates varying from 14.5% to 48%. The progressive tax brackets are the following (source): (Table 1) An additional solidarity surcharge also applies (2.5 percent on the taxable income between EUR80,000 and EUR250,000 and 5 percent on the taxable income exceeding EUR250,000). For each bracket there is a maximum deductible amount that lowers your taxa…