The special tax status (NHR) establishes, under certain conditions, the exemption of foreign source income from income tax in Portugal (IRS/income tax) as well as a limited 20% taxation of income from employment contract work and independent personal services, in both cases if it derives from high value added activities.

In fact, this means that high value-added income will be taxed on a flat income tax scale at a rate of 20%, while in Portugal the income tax rate for all other categories of taxpayers depends on the amount of income and can go up to 53%, i.e. it is differentiated.

Passive income from foreign sources (interest, dividends, certain royalties, capital gains, including capital gains and income from immovable property), is exempt in Portugal provided that it is potentially taxable in the source State (i) under the rules of an existing Double Tax Treaty or (ii) if not under the rules of the OECD Model Tax Convention, unless such income is blacklisted or derived from a Portuguese

Retirement income from abroad is not subject to income tax (IRS)

Labor income from abroad is not subject to income tax (IRS)

Value-added foreign earned income is not subject to income tax (IRS)

Income from foreign sources from independent personal services is exempt from income tax in Portugal, provided that it is derived from high value-added scientific, artistic or technical activities and is potentially taxable in the source state (i) under the rules of an existing Double Tax Treaty or (ii) if not, under the rules of the OECD Model Tax Convention, subject to other necessary conditions.

The following professions fell into the ruling No. 12/2010, January 7, as "value-added activities of a scientific, artistic or technical nature:

• Architects, engineers and geologists
• Artists, actors, and musicians
• Auditors, tax consultants
• Doctors and dentists
• Teachers
• Psychologists
• Archaeologists
• Biologists and life sciences experts
• Programmers
• Software consulting and activities related to information technology and information technology
• Computer programming activities
• Computer consulting
• Management and operation of computer equipment
• Information services activities
• Data processing, placement of information and related activities / Web portals
• Data processing, posting activities and related activities
• Other types of information services
• Activities of information agencies
• Other types of information services
• Research and development
• Research and development in natural and physical sciences
• Research and Development in Biotechnology
• Designers
• Investors, administrators and managers (in the context of company management)

The following professions fell into the ruling No. 12/2010, January 7, as "value-added activities of a scientific, artistic or technical nature:

• Architects, engineers and geologists
• Artists, actors, and musicians
• Auditors, tax consultants
• Doctors and dentists
• Teachers
• Psychologists
• Archaeologists
• Biologists and life sciences experts
• Programmers
• Software consulting and activities related to information technology and information technology
• Computer programming activities
• Computer consulting
• Management and operation of computer equipment
• Information services activities
• Data processing, placement of information and related activities / Web portals
• Data processing, posting activities and related activities
• Other types of information services
• Activities of information agencies
• Other types of information services
• Research and development
• Research and development in natural and physical sciences
• Research and Development in Biotechnology
• Designers
• Investors, administrators and managers (in the context of company management)

The following professions fell into the ruling No. 12/2010, January 7, as "value-added activities of a scientific, artistic or technical nature:

• Architects, engineers and geologists
• Artists, actors, and musicians
• Auditors, tax consultants
• Doctors and dentists
• Teachers
• Psychologists
• Archaeologists
• Biologists and life sciences experts
• Programmers
• Software consulting and activities related to information technology and information technology
• Computer programming activities
• Computer consulting
• Management and operation of computer equipment
• Information services activities
• Data processing, placement of information and related activities / Web portals
• Data processing, posting activities and related activities
• Other types of information services
• Activities of information agencies
• Other types of information services
• Research and development
• Research and development in natural and physical sciences
• Research and Development in Biotechnology
• Designers
• Investors, administrators and managers (in the context of company management)

The economic situation in Portugal has changed since the previous law, with a significant change in the dynamics of job creation. In fact, employers from different sectors have faced difficulties in hiring workers with different skills and qualifications, so in this context it was important to strengthen the attractiveness factors for workers who want to come to Portugal, contributing to the national economy. From January 01, 2020, qualified workers will be able to qualify for the application of the special tax status.

- CEO and executive directors of companies

- Directors of administrative and commercial services

- Directors of production and specialized services

- Directors of hotels, restaurants, retail and other services

- Specialists in physics, mathematics, engineering, and related techniques

- Physicians

- Dentists

- Professors of higher education

- Information and communication technology experts

- Authors, journalists and linguists

- Artists

- Intermediate science and engineering technicians and professions

- Information and communication technology technicians

- Farmers and skilled workers in agriculture and animal husbandry.

- Skilled workers in forestry, fishing and hunting

- Skilled workers in industry, construction, and crafts, including but not limited to skilled workers in metallurgy, metalworking, food processing, woodworking, apparel, crafts, printing, precision tool making, jewelers, craftsmen

- Machine and machine operators and adjusters, namely, stationary and machine tool operators

Workers covered by the above-mentioned professional activities must have the qualification level No. 4 of the European Qualifications (Quadro Europeu de Qualificações (QEQ) or level No. 35 of the Classificação Internacional Tipo da Educação (CITE), or proven five years of professional experience.

From January 01, 2020 the procedure for applying for this tax status will change. All applicants will receive this tax status automatically when registering and requesting on the Finance Portal (tax office of Portugal), if they meet the necessary requirements.