How to deal with NHR and apply for IFICI in Portugal
A guide for Portuguese tax residents who already have the old NHR or want the current IFICI regime. You will check whether you qualify, apply through the right body and declare the regime correctly in your annual IRS return.
Work out which regime is actually open to you
Ordinary applications for NHR (the non-habitual resident regime) stopped on 1 January 2024 under Lei n.º 82/2023 (the 2024 State Budget law). Those who obtained NHR in time keep it for the original ten-year period. Transitional applications from people who became resident in 2024 were accepted if special conditions were met, but that deadline has now passed. In 2026 you generally cannot get a new NHR from scratch: all that is left is correcting an old case, appealing a refusal or enforcing a decision on an application filed earlier.
For new residents there is IFICI — Incentivo Fiscal à Investigação Científica e Inovação (the tax incentive for scientific research and innovation), set out in Article 58.º-A EBF (Article 58-A of the Tax Benefits Code). As a rule, you must become a Portuguese tax resident and not have been one in any of the previous five years. An earlier registration as a resident can lead to a refusal, even if in practice you hardly lived in the country at the time.
Check your profession, your employer and your grounds for IFICI
IFICI is not granted for a high salary, a degree or remote work alone. You need specific grounds under Article 58.º-A EBF: for example, scientific or teaching work, research and development, work at a certified start-up, certain highly qualified positions at an eligible company, or activity within a recognised investment project. The lists of professions, the qualification requirements and how they are confirmed are set out in Portaria n.º 352/2024/1 (the order on applying IFICI).
Check all of these at once: your job duties, education and experience, the company's line of business, its certificates and which body confirms your grounds. The job title in your contract is not enough on its own. Nor does IFICI turn any self-employed activity or the sale of goods into qualifying work.
First compare IFICI, NHR and the ordinary rules
Under IFICI, net category A and B income from the relevant qualifying activity is taxed at a special IRS rate of 20%. The regime lasts for up to ten consecutive years, counting from the year you became tax resident. This is only an income tax rate: it does not remove Segurança Social (social security contributions), IVA (VAT) or your employer's obligations.
Some foreign income in categories A, B, E, F and G may be exempt in Portugal under IFICI, depending on the rules on where the income comes from and the exemption method. A foreign pension is not automatically exempt, and income from a jurisdiction on Portugal's blacklist may be taxed at the statutory rate of 35%. Money arriving from a foreign bank or a foreign company does not in itself prove that the income has a foreign source.
The special regime is not always better than the progressive scale. Compare the total IRS, deductions, joint and separate returns for spouses, foreign income and IRS Jovem (the tax break for young workers). In practice, NHR being chosen automatically instead of the ordinary scale led to a difference of about €2,500, and in another case comparing the options saved around €5,000.
Get your tax residence and address in order
Check on the Portal das Finanças (the tax portal) from which date you are registered as a tax resident and which address is in the cadastro (the taxpayer register). Tax residence is not decided only by the entry on the portal: what counts includes, in particular, the number of days and having a home that suggests you live there habitually.
If your address was changed retroactively, keep the rental contract, the landlord's registration of the contract, the property documents, your employment contract, records of entries into the country and other proof of when you moved. A mistake in your year of residence can cost you IFICI because of the five-previous-years check, or start the ten-year period earlier than you expected.
Gather proof for the grounds you have chosen
You will usually need your passport, NIF (Portuguese tax number), proof of your tax address, an employment or service contract, a detailed description of your duties, your degree and proof of professional experience. Depending on the grounds, you may also be asked for a statement from your employer, the company's activity code, proof of start-up status, of taking part in a research project, of R&D spending or of a recognised investment project.
It makes sense to get a foreign degree apostilled in advance if the Apostille de Haia (Hague Apostille) applies to your country, and to have it translated into Portuguese. Check the certification and translation requirements with the body that will confirm your particular IFICI grounds.
Apply through the competent body
There is no single body that confirms IFICI for everyone. Depending on the grounds, those involved include the Fundação para a Ciência e a Tecnologia — FCT (Foundation for Science and Technology), the Agência Nacional de Inovação — ANI (National Innovation Agency), AICEP (the investment and foreign trade agency), IAPMEI (the agency supporting small and medium-sized businesses), Startup Portugal (the start-up support organisation), the Autoridade Tributária e Aduaneira — AT (the tax and customs authority) or the regional body of the Azores and Madeira.
As a general rule, you must apply by 15 January of the year after the year you became tax resident. For example, if you became resident in 2026, aim for 15 January 2027. Residents from 2024 had a separate transitional deadline of 15 March 2025. If you apply late, the regime is generally not granted retroactively: it can apply from the year you applied, but only for what is left of the original ten-year period.
Keep the confirmation of submission, the case number and all attachments. Do not go by the old NHR deadline of 31 March: IFICI works differently, and people have missed the January window because of this.
Check that IFICI has appeared in the tax system
Approval by the relevant body and the regime showing up on the Portal das Finanças (the tax portal) may not happen at the same time. Check the status before filing your IRS and keep the decision or your employer's confirmation. If the details have not appeared, write via e-balcão (the tax office's online help desk), attaching the application number and the competent body's decision.
The CERTA status (the return has been accepted as formally correct) does not yet mean that the AT has calculated the tax or finally accepted all the tax breaks. In practice, returns with IFICI could stay without a liquidação (tax assessment) for much longer than ordinary automatic returns.
File your annual IRS return with the right annexes
A Portuguese tax resident declares their worldwide income. The annual Modelo 3 IRS (the income tax return) is usually filed from 1 April to 30 June of the following year. For the regime and the qualifying activity you use Anexo L (the annex on the special tax regime), for income from abroad — Anexo J (the annex on foreign income); annexes A, B, E, F or G may also be needed.
Do not mechanically apply the 20% rate to all your income. Separate the qualifying activity, ordinary income, dividends, interest, capital gains, rent and pension. For foreign income, check separately where it comes from under Portuguese rules, the applicable international treaty and whether tax paid abroad can be credited.
Before submitting, compare joint and separate filing for spouses, the special rate and englobamento (adding the income to the progressive scale). A mistake can be corrected with a declaração de substituição (a replacement return), but the AT may ask for contracts, certificates of tax paid abroad, bank documents and transfers.
Do not combine NHR or IFICI with an incompatible tax break
An active NHR or IFICI can block IRS Jovem (the tax break for young workers). If IRS Jovem works out better, first find out how to give up your current regime. Do not count on simply unticking a box in your return: the tax system checks your status in the register and may return an error or ask for a correction.
A request to give up NHR is sent to the Direção de Serviços de Registo de Contribuintes — DSRC (the taxpayer registration service) or made as instructed by the AT. Use correio registado (registered post) and at the same time follow the case via e-balcão (the online help desk). Before giving it up, weigh up all the remaining years and your foreign income: you may not be able to get back a regime you ended voluntarily.
Cancellation can take a long time. In one case, about five and a half weeks passed between the letter of 7 May and the notification of 15 June; in another, the status disappeared completely only after four and a half months and many requests. Even after notification, the portal sometimes still treats NHR as active.
Check that NHR really has been cancelled for IRS Jovem
If you are giving up NHR for IRS Jovem, check more than the cancellation letter and the cadastro on the Portal das Finanças. There have been cases where the letter had already arrived and NHR had gone from the personal area, but when filing a return or a replacement return the system still gave an error saying NHR status was active.
Also check the Consultar IRS Jovem service on the Portal das Finanças: it shows whether you can use IRS Jovem and which year of the tax break it is. If it still shows a block because of NHR, write via e-balcão and attach screenshots. In some cases, complaints through the Queixas Registadas page and a complaint to the ombudsman helped.
If NHR has not been cancelled by 30 June, a practical option is to file your return on time without IRS Jovem and, once the regime has been fully cancelled, file a declaração de substituição (a replacement return) with IRS Jovem. But keep a separate eye on the tax due and the payment deadlines: waiting for NHR to be cancelled does not in itself remove the obligation to pay tax under an assessment already issued.
In July and August 2026 practical cases came up: a letter cancelling NHR did not always lift the IRS Jovem block straight away, and the Consultar IRS Jovem service helped show whether the cancellation had gone through in the system.
Check the assessment and appeal it if necessary
After filing, download the declaração (the return) and the demonstração de liquidação (the tax assessment) and check the income categories, the rate applied, the foreign tax, the deductions and the final amount to be refunded or paid. Do not treat the CERTA status as confirmation that the calculation is right.
If the mistake is yours, you usually file a declaração de substituição (a replacement return). If the AT's calculation is wrong or the return is stuck, use e-balcão (the online help desk), a reclamação graciosa (an administrative tax complaint) or another suitable means of appeal. Keep to the deadline given in the assessment or notification: a dispute does not always suspend the obligation to pay the tax.
Complicated corrections can take months. In one known case, after a late NHR approval, refiling the returns and a complaint about inaction, the final decision took about six months.
What it costs, according to community conversations
| mistake in choosing NHR | a difference of about €2,500: instead of a refund of about €1,000, about €1,500 had to be paid | source |
| saving after comparing | about €5,000 compared with the automatic “NHR 20%” option | source |
| translation of the employment contract | €130 | source |
| loss from a mistake, as the author puts it | ~€2,500 | source |
| saving from the best way of filing | €5k | source |
What to bring
- Passport or cartão de residência (residence card)
- NIF (Portuguese tax number)
- Access to the Portal das Finanças (the tax portal)
- Proof of the date of tax residence and of your address
- Employment contract or service contract
- Description of the position and your actual duties
- Employer's statement about the position and the project
- Degree with an apostille, if required
- Translation of the degree and professional documents
- Proof of the required work experience
- Documents on the company's line of business and status
- Start-up or research project certificate
- The competent body's decision on IFICI
- Certificates of all Portuguese and foreign income
- Certificates of tax paid abroad
- Previous IRS returns and assessments
- Letter or confirmation that NHR has been cancelled, if you are giving it up for IRS Jovem
- Screenshots of the error when filing IRS and of the status in Consultar IRS Jovem, if NHR has been cancelled but the system still blocks IRS Jovem
Where people most often trip up
- Calling IFICI “NHR 2.0” and wrongly assuming any new resident can get it.
- Confusing the old NHR deadline of 31 March with the IFICI deadline of 15 January of the following year.
- Checking only the profession, but not the employer, the project and the actual duties.
- Treating any income from a foreign company or a foreign bank as foreign income.
- Applying the 20% rate to all income, including dividends, sales of assets and pensions.
- Forgetting that the IFICI rate does not remove Segurança Social (social security contributions) or IVA (VAT).
- Not declaring foreign income, wrongly taking an exemption as permission not to show it.
- Choosing NHR or IFICI without comparing it with the progressive scale and a joint return.
- Trying to use IRS Jovem while NHR or IFICI is active.
- Thinking the NHR cancellation letter is enough for IRS Jovem, when the tax system may still see NHR as active.
- Treating the CERTA status as final approval of the tax break and the tax assessment.
- Giving up NHR before working out what it means for the remaining years and foreign income.
- Not keeping the submission receipt, the body's decision and proof of qualifications.
How it went for people
Cancelling NHR for the IRS Jovem regime
On 25 June a man asked via e-balcão for NHR to be cancelled so he could use IRS Jovem, and after several generic replies he sent a registered letter to the tax office on 13 July. On 29 July he filed a complaint through his personal area, and on 30 July the tax office said NHR had been cancelled; the same day, any mention of the regime disappeared from his account. His accountant submitted a new return with IRS Jovem, but it got the status DECLARAÇÃO COM ANOMALIAS, because the system still treated NHR as active. The matter is still not resolved and the battle with the tax office goes on.
NHR unexpectedly confirmed two years later
A man applied for NHR late, after 31 March, and was refused. Two years later, while his second return was being checked, a registered letter arrived after 2.5 months confirming NHR and allowing him to refile his returns within 30 working days. As IRS Jovem turned out to be better, his accountant sent a registered letter asking for NHR to be cancelled. There has been no reply about the cancellation yet.
The progressive scale became better than NHR
For 2024, when the options were compared, NHR gave a refund €23.56 bigger than the progressive scale, so the return was filed with NHR. In 2025 the income, social security contributions and tax withheld were the same as the year before to the cent, but the calculations were done again. The progressive scale now came out €769.50 better than NHR, and the refund under it went up by €793.06 over the year. As a result, the progressive scale was chosen for the 2025 return.
Young workers' tax break refused because of an NHR entry he never used
A man filed a return with the IRS Jovem tax break and was rejected: it could not be applied because the register listed him as a residente não habitual or as registered for IFICI. Yet he had never used the NHR regime itself and had got no benefit from it — the status was only an option. The law says the tax break is not available to those who use or have used the regime, and says nothing about merely being registered. He did not remove the tax break from his return, but wrote to the Finanças via e-Balcão explaining that he had received no benefit, and is waiting for a reply.
Interest at a foreign bank taxed at 28% even though tax had been paid
A man with NHR was filing a return for the first time and entered two items of income from foreign banks in Anexo J, noting that tax had been paid in the country of origin. On one of the lines he had received €604.13 and paid €78.54 in tax — 13%. It was this line the Finanças picked on, charging 28%, that is €169.16. The lines differed only in the income code — E21 on the first and E22 on the second — and he could not work out whether the problem was the wrong code or a mistake by the tax office.
Same income, different filing — and a €480 refund
For many years a woman filed her IRS return through a Portuguese accountant, who filed it without a word: there were no problems, and no optimisation was ever offered — “everything here has already been taken into account and paid”. This year she went to another specialist, and with the same figures the tax was recalculated so that the overpayment was due back to her. The return was filed without NHR, a few days later it got the status certa, and a couple of weeks after that €480 arrived in her account.
Retold in our own words from messages in open chats. The link leads to the full original message.