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New NHR 2.0: A Complete Guide to Article 58.º-A

Article 58.º-A of the Investment Tax Code, introduced by Law No. 82/2023 of December 29th, represents a significant evolution in the tax benefits regime to attract talent and investment to Portugal. This new regime, often referred to as NHR 2.0, aims to incentivize scientific research, innovation, and the country’s economic development.

Who can benefit from NHR 2.0?

This tax incentive is directed at individuals who become tax residents in Portugal, according to paragraphs 1 and 2 of Article 16.º of the IRS Code, who have not been residents in Portuguese territory in the previous five years and who carry out specific activities. These activities include:

  • Higher education teaching and scientific research: Includes scientific employment in entities dedicated to the production, dissemination, and transmission of knowledge, as well as positions in recognized technology and innovation centers.
  • Qualified jobs and members of social bodies: Includes those included in the contractual benefits for productive investment and highly qualified professions in companies with relevant applications or in industrial and service companies that are exporters.
  • Other qualified jobs: Includes those in entities with economic activities recognized as relevant for the national economy, such as attracting productive investment and reducing regional disparities.
  • Research and development: Includes personnel whose costs are eligible for tax incentives in business R&D.
  • Startups: Includes positions in entities certified as startups.
  • Autonomous Regions: Includes jobs and activities carried out by tax residents in the Azores and Madeira.

How does the tax benefit work?

Beneficiaries of this regime can be taxed, in IRS terms, at the special rate of 20% on the net income of categories A and B earned within the scope of the eligible activities, for a period of 10 consecutive years from the year of their registration as a resident in Portugal territory, without prejudice to the option for inclusion.

Requirements to maintain the benefit

To maintain the right to this reduced tax rate, the taxpayer must be considered a tax resident in Portugal at any time of the year and continue to earn income within the scope of the eligible activities.

Resuming the benefit

If the beneficiary has not enjoyed the right to reduced taxation in one or more years of the 10-year period, they can resume the benefit in the remaining years, provided they become a tax resident in Portugal again and resume earning eligible income.

Registration and communication

The registration of beneficiaries and the communication of data to the competent authorities are regulated by a decree of the members of the Government responsible for the areas of finance, economy, and science and higher education.

Exceptions and limitations

There are some exceptions and limitations to NHR 2.0. Those who already benefit or have benefited from the non-habitual resident regime or who have opted for taxation under Article 12.º-A of the IRS Code cannot benefit from this regime.

NHR 2.0 represents an opportunity to attract talent and investment to Portugal, boosting the country’s research, innovation, and economic development.

Additional resources

We hope this complete guide to NHR 2.0 has been helpful. If you have any questions, please do not hesitate to contact us.

This article is for informational purposes only and is not intended to be exhaustive in relation to the matters covered here and all requirements/applicable law and rules or exceptions and it includes hypothetical situations in order for the client to better understand the taxation in any way it contains guidance or advise to any regime or particular situation.. However, if you still need to be completely clear and continue with doubts, or if you want our help, feel free to contact us through rjs@fslegal.pt.

Written by Rodolfo José Santos

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