Return to Portugal through the RNH Regime for Emigrants

Although this regime is particularly important for migrants wishing to return to Portugal, it seems to remain largely unknown among our migrant community. 

Under the RNH scheme, emigrants (or anyone else) who qualify as beneficiaries shall enjoy, for a consecutive period of 10 years, irs exemption on their passive income (income, capital income and capital gains) provided they are obtained outside the country.

This scheme allows the above-mentioned income to be exempted (pensions are taxed at the flat rate of 10%) of taxation in Portugal, provided that they can be taxed in the country of origin in accordance with the international agreement to eliminate the double taxation in force, and are not considered obtained in Portugal in accordance with national law.

Where there is no international agreement to eliminate double taxation, income shall be effectively taxed in the other country, territory or region, provided that the income is not considered to have been obtained in Portuguese.

However, it is important to note that the exemption provided for in the Law does not cover the passive income obtained in territories considered tax havens by the Ministry of Finance, such as Andorra, Bahamas, British Virgin Islands (BVI), Liechtenstein, among others.

Taking into account the conditions described above, an emigrant, provided that he meets all the requirements that are legally required of him, can count on 10 years without paying IRS on pensions obtained in the country where he emigrated in the past. The same applies to investments made, either in the country to which you emigrated or in another country where you have made investments.

The RNH scheme is also in favour of emigrants wishing to continue to develop their professional activity on their return to Portugal. The scheme also guarantees, for a period of 10 years, an IRS rate of 20% on activities of high added value, of a scientific, artistic or technical nature, regardless of the amount of the salary paid.

These high value-added activities include administrators, managers, consultants, auditors, artists, designers and physicians. The list provided for in the Law mainly covers activities that require a high degree of training and specialization, and may also be relevant for expatriates working in the Madeiran hotel sector and holding management or intermediate positions.

Under the RNH scheme, any national or foreign national residing, for tax purposes, in Portuguese territory, may benefit from the scheme, provided that he has not been considered a resident in Portuguese territory in any of the five years preceding the year in which he intends to start. taxation as a non-habitual resident.

Although an emigrant returning to Portugal can quickly obtain registration from the Tax Authority as RNH, it is highly recommended that you seek tax advice given its sometimes complex or extensive asset structure.

Without careful analysis of its assets and appropriate technical advice, the emigrant runs the risk of not benefiting from the scheme and, consequently, being taxed under the general system of taxation of natural persons resident in the country, with rates of up to 48%.

There are tax advantages that our emigrants do not know when they return, which can be a well-deserved reward for the long years they have worked abroad

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