NHR Regime
Regime dos Residentes Não Habituais · Non-Habitual Resident Tax Regime
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A Portuguese tax regime that offered qualifying new residents a flat 20% rate on professional income for 10 years. Replaced by IFICI (NHR 2.0) for applications from 2024 onward. Existing NHR holders keep their status.
NHR (Non-Habitual Resident) was Portugal's flagship tax incentive for attracting foreign talent and investment. If you arrived before 2024, registered as a Portuguese tax resident, and applied on time, you likely benefited from a flat 20% rate on your professional income for up to 10 years.
That's a significant difference from the standard progressive rates, which climb to 48% at higher income levels.
NHR is closed, but existing holders keep it
Since January 1, 2024, NHR has been closed to new applicants. The scheme was replaced by IFICI, a narrower successor. If you're reading this and wondering whether you can apply for NHR: you can't, unless you applied before the December 31, 2023 deadline.
If you already have NHR, you keep it. Portugal honored existing applications. The 10-year clock runs from the year your status was granted.
How NHR works for freelancers
On the simplified regime, your professional service income (Categoria B) qualifies for the 20% flat rate under NHR. This applies to income from Portuguese clients. Income from foreign clients under NHR had an exemption mechanism, the details depend on whether a double taxation treaty exists between Portugal and the source country.
The practical impact: if you earned €60,000 in 2025 as an NHR freelancer on the simplified regime, your taxable income after the 25% deemed costs deduction is €45,000. At a 20% NHR rate, your IRS is €9,000. At standard progressive rates, the same income would result in a significantly higher bill.
NHR in your IRS declaration
You still file Modelo 3 with Anexo B. Your income is declared the same way as any freelancer. The NHR rate is applied in the calculation phase, not the declaration phase, the form doesn't ask you to choose a tax rate.
What you should check: when you run the IRS simulation (Simular), verify that the system has applied 20% to your qualifying income rather than standard progressive rates. It should do this automatically if your NHR status is registered in the AT system, but it's worth confirming before you submit.
IFICI: the successor for new applicants from 2024
IFICI targets a narrower group than NHR did: researchers, technology professionals, highly qualified workers, and startup founders. If you arrived in Portugal in 2024 or later and want to apply, this is the current scheme.
The mechanics are similar (a flat rate on Portuguese professional income for 10 years) but the eligibility criteria are stricter. The IFICI application process goes through AT.
For existing NHR holders, IFICI is not relevant unless your NHR period ends and you want to explore what options remain.
For a full comparison of NHR vs IFICI and how each affects your 2025 IRS filing, see NHR vs IFICI in 2025: What Expat Freelancers Need to Know.
Frequently asked questions
What is the NHR regime?
NHR (Non-Habitual Resident) was a Portuguese tax regime that gave qualifying new residents a flat 20% tax rate on Portuguese-sourced professional income, and in many cases a 0% rate on foreign-sourced income, for 10 years. It was designed to attract skilled workers and retirees to Portugal.
Is NHR still available?
NHR closed to new applications from January 1, 2024. It was replaced by IFICI (NHR 2.0), a narrower successor. People who already had NHR status before 2024 keep their status until their 10-year period ends. If you applied before December 31, 2023 and were approved, you're on the old NHR scheme.
How does NHR affect IRS filing?
NHR beneficiaries still file Modelo 3 every year. The difference is the tax rate applied to qualifying income, 20% flat instead of progressive rates that go up to 48%. You declare income in Anexo B as normal; the NHR rate is applied during the tax calculation. Confirm the correct rate is applied before submitting by running the IRS simulation.
What is IFICI?
IFICI (Incentivo Fiscal à Investigação Científica e Inovação) is the successor to NHR from 2024. It's narrower, primarily targeting researchers, technology workers, and startup founders. The mechanics are similar: a flat rate on qualifying Portuguese-sourced income for 10 years. New applications go through IFICI, not NHR.
Related terms
Portugal's personal income tax: the annual tax that solo entrepreneurs pay on their individual income, declared each spring for the previous year's earnings.
Personal Income TaxIRSThe English name for IRS (Imposto sobre o Rendimento das Pessoas Singulares): the annual tax on individual income in Portugal, including freelance and self-employment earnings.
Regime SimplificadoRegime Simplificado de Tributação · Simplified Tax RegimePortugal's simplified tax regime for solo entrepreneurs and small businesses, where taxable income is calculated using fixed coefficients applied to gross revenue.
Trabalhador IndependenteSelf-Employed WorkerThe Portuguese term for an independent worker or sole entrepreneur, the equivalent of a freelancer or sole trader in other countries.