%22%2F%3E%3Cpath%20d%3D%22M-4%2066%20C%2014%2050%2C%2034%2082%2C%2050%2066%20S%2084%2050%2C%20100%2066%22%20stroke%3D%22white%22%20stroke-opacity%3D%220.55%22%2F%3E%3C%2Fg%3E%3C%2Fsvg%3E)
NHR vs IFICI — legacy vs successor
Portugal closed the classic NHR on 2023-12-31 and shipped IFICI as the successor. If you were already registered you keep NHR; if you arrived from 2024 on, IFICI is your only shot — and only if your activity qualifies.
| NHR (legacy) | IFICI (successor) | |
|---|---|---|
| Status | Closed to new registrations on 2023-12-31. Existing beneficiaries keep it. | Open — the successor regime, live since 2024. |
| Eligibility | PT tax resident who registered before end of 2023 (transitional clause: end of Mar 2024 with residency by end of 2023). | PT tax resident from 2024 with a qualifying activity + no PT residency in the last 5 years. |
| Rate on qualifying employment | 20% flat on high-value employment; 10% on foreign pensions. | 20% flat on qualifying Portuguese employment income. |
| Duration | 10 years from the year of registration. | 10 years from the year the activity begins. |
| Foreign passive income | Generally exempt when taxable in the source country per the DTA. | Generally exempt, subject to activity match + DTA. |
| Activity coverage | Broad — the old high-value list covered engineers, doctors, IT, architects, artists, freelancers. | Narrow — scientific research, tech at certified startups/SMEs, higher-ed teaching, highly-qualified roles at certified employers. |
| Best for | Anyone already grandfathered — you have a broader activity list and 10 tax-friendly years to burn. | New PT arrivals in tech, science, or certified higher-ed roles. |
Which one applies to you?
When did you become a Portuguese tax resident?
Frequently asked questions
I registered as NHR in 2024 — am I still grandfathered?
There's a transitional clause: residents by end of 2023 who registered by end of March 2024 typically qualified. Later applications are case-by-case at AT discretion. Confirm with a certified contabilista before assuming the answer.
Can I switch from NHR to IFICI mid-cycle?
No. NHR beneficiaries stay on NHR through their 10-year window. IFICI is only available to new residents from 2024 who never held NHR.
Is 20% always better than progressive IRS?
For income over ~€30k/year, yes. Below that the progressive scale can produce an equivalent or lower effective rate, though the flat rate still simplifies filing.
Which one covers my foreign rental / dividends?
Both. Foreign passive income is generally exempt in Portugal under both regimes when the source country retains taxing rights per the DTA — which is the case for most G7 and EU treaties.