Portugal sits 186th out of 217 in our world ranking, with a FiScore of 3.7 out of 10. A scale reaching 48%, VAT at 23%: on paper there is nothing to see.

Its reputation came from somewhere else, from a regime that drew tens of thousands of foreign residents for a decade. That regime closed on 1 January 2025. A great many pages still describe it as available. Here is where things actually stand.

What Portugal takes, with no special regime

Taxable income Rate (IRS scale)
First band 14.5%
Top band 48%

Several bands sit in between, and a solidarity surcharge applies to very high incomes. Corporate tax runs between 15% and 19% depending on size and regime, and VAT is 23%.

In short: without a special regime, Portugal is an ordinary European country, slightly gentler than most on companies and unremarkable on income.

The NHR is gone, and that changes everything

The non-habitual resident status gave ten years of very broad exemption on foreign-source income, plus a reduced rate on certain Portuguese professions. It is what built the country's reputation.

It was abolished on 1 January 2025. People already inside keep it until their ten years run out, but nobody new gets in.

If you read anywhere that NHR is still open, that page has not been updated. It is the kind of mistake that costs real money when you move on the strength of it.

What replaced it: IFICI, and it is much narrower

The new regime is called IFICI, nicknamed NHR 2.0. It gives a flat 20% for ten years on Portuguese employment and self-employment income, instead of a scale reaching 48%.

The difference is eligibility. Where NHR was broad, IFICI targets scientific research, higher education, qualified R&D, technology, and roles inside companies certified as strategic by Portuguese public bodies.

Two hard conditions:

  • you must not have been a Portuguese tax resident in any of the five preceding years;
  • your activity must fall inside the listed categories, with a certified entity.

A freelance consultant billing foreign clients, someone living off investments, a retiree: all outside. This is a regime designed to attract skills, not to shelter income.

Pensions? The exemption that made Portugal a retirement destination is gone. For a foreign retiree, Portugal now offers no particular tax advantage.

Crypto, where Portugal still holds a card

Since the 2023 budget the rule comes down to a holding period:

Holding period Tax on the gain
Under 365 days 28%
365 days or more exempt

The clock runs per asset, and a crypto-to-crypto swap resets it. Portugal is therefore still attractive if you hold for the long run, and no longer attractive at all if you trade.

If you are American

Nothing above releases you from the United States. America taxes its citizens on citizenship, so moving to Portugal adds a filing obligation rather than removing one. You keep filing US returns, keep reporting foreign accounts, and the US-Portugal treaty coordinates the two systems without cancelling either.

The practical consequence is that a 20% Portuguese rate does not mean you pay 20% overall. Model both sides before you move, with someone who does cross-border work for a living.

If you are British

Leaving the UK is governed by the Statutory Residence Test, which counts days and also ties. Get the year of departure wrong and you are UK resident regardless of where you sleep.

Worth noting: the UK abolished its own non-dom regime in April 2025, in the same window Portugal closed the NHR. The two easiest routes for British taxpayers shut within months of each other, which is why so much attention moved to Italy, Greece and the Gulf.

The drawbacks

Lisbon and Porto have become expensive, partly because of the influx the NHR itself created. The tax arithmetic of five years ago no longer holds, and neither does the housing arithmetic.

Administration is slow, residence permits in particular, with waits measured in months.

The rules move. A regime closed in 2025 after ten years, a crypto rulebook invented in 2023. Portugal legislates quickly, which is worth remembering before building a ten-year plan on today's text.

So, who is Portugal for?

  • A researcher, engineer or tech professional hired by a certified entity: yes, IFICI is built for you.
  • A long-term crypto holder: yes, the 365-day rule is clear and generous.
  • A retiree: no longer. The advantage has gone.
  • A freelancer or investor: no. You will pay the ordinary scale, up to 48%.

The full table of Portuguese rates, with sources and the verification date, is on our Portugal page. To put it next to another country, the comparison tool does the arithmetic.

Sources

Figures verified in August 2026 against the Portuguese tax authority, PwC Tax Summaries and firms established in Portugal. The update date is at the top of this article, and an error reported to us gets fixed.

This page informs, it does not advise. Before deciding anything, talk to a professional who will look at your situation, as our terms of use set out.