State Budget Law: Extension of the Tax Regime for Former Residents

The 2024 State Budget Law extended the tax regime applicable to “former residents” to those who become tax residents in the years 2024 to 2026.

This regime consists of excluding from taxation 50% of taxpayers’ employment income (Category A) and business and professional income (Category B), up to a maximum of €250,000.00.

Those who become tax residents between 2024 and 2026 may only benefit from this regime for 5 years.

Who can benefit from this regime?

1. Those who become tax resident by 2026, i.e. those who spend more than 183 days a year in Portugal or, spending less time, have a permanent home in Portugal, among other factors indicating that Portugal is their habitual residence;
2. Those who have not been considered tax resident in Portugal in any of the previous five years
3. Those whose tax affairs are in order;
4. Those who have not applied to register as non-habitual residents.

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