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NHR 20% Flat Rate - Again

NHR 20% Flat Rate - Again

Old Feb 26th 2021, 11:03 am
  #1  
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Default NHR 20% Flat Rate - Again

I obtained a NIF in November using a UK address.

I arrived in PT at the very end of December and gained residency (CURE) before 31st.

I was only able to change my address on Financas in early February, because, you know, mindless Portuguese bureaucracy.

I need to register for NHR (20% flat rate - I fall into one of the categories). I am, however, unable to register for 2020 because my address was not a PT one in 2020, even though I became a resident in 2020.

I was under the impression that one becomes a tax resident as soon as one becomes a resident.

But if I am unable to apply for NHR for 2020, and apply for 2021 only am I going to get into trouble with the tax authorities? Will they say 'you should have applied in 2020 as that's when you became a resident'.

Anyone have any insight. I contacted some tax lawyers/accounts but no one is responding, because, you know, Portugal.


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Old Feb 26th 2021, 2:17 pm
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Default Re: NHR 20% Flat Rate - Again

What is the address on your CURE Residencia certificate? Surely it is your portuguese address? The date of your Residential status is what is relevant to the NHR tax situation. However note that Portugal operates the split year taxation system, so if you were tax resident somewhere else for most of the tax year 2020 you should pay your tax in that country up to the date you were resident in Portugal / or when you officially moved out of that tax régime - eg did you inform HMRC you were leaving on a certain date if it was the UK? For a part year in Portugal you should register as NHR in that year but since your bit of 2020 is so small (less than a month) I can see that may be a bit of a nonsense!! It would be to your advantage to only use NHR from January 2021, as that gives you an extra year in your 10-year cycle, as 2020 would apply as a whole year, rather than taking it from December 2020. That is as I understand it anyway, having moved from Spain half way through the tax year a couple of years ago. Others on the forum may confirm or clarify ...

You do need to pin down a Portuguese accountant but you do have until March to sort out the details. If you fall "into one of the categories" can you get clarification from that side of things, perhaps Social Security can advise as you will be getting into the system there too?
(I think the timing of the change of address on the Finanças system is probably not going to affect anything as you should have your PT address on the Residencia Cert?)
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Old Feb 27th 2021, 10:10 am
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Default Re: NHR 20% Flat Rate - Again

I have my PT address on my CRUE but I could not update my UK NIF address to the PT one until February therefore, according to the tax office, I was not resident in PT until Feb 2021. I was a resident in 2020 for less than 7 days and have continued to pay tax in the US (as that is where I moved from and am still employed from) from then until 1 March, when I switch over to a PT contract. I am not registered with SS yet (that will happen as of March).

On the financas website there are two options: apply for NHR for 2020 or 2021. I am unable to apply for 2020 as the system blocks me, noting that as my address was not a PT one in 2020, I am not eligible for NHR for that year. I'm fine to just apply for 2021, I just don't want to run into issues in April 2022 ...
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Old Feb 27th 2021, 11:14 am
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Default Re: NHR 20% Flat Rate - Again

Sherbert - you need to chat to a tax advisor - one that is savvy with USA laws - they may do the whole year anyway, and with PT laws as to which takes precedence the CRUE address for your residential status (you had accommodation available to you as your new home) or the timing of the registration of the PT address on the Finanças' information - can they prove that you did not have residency from a certain date? See a tax advisor first, then off to the Finaças office to ask directly, perhaps taking the advisor with you?
Alternatively the tax advisor might say you are better just signing up for NHR from 2021, but can perhaps discuss the legality and future repercussions from a better standpoint than us?
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Old Mar 27th 2021, 12:01 pm
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Default Re: NHR 20% Flat Rate - Again

On the back of this thread - this year's application deadline is looming next week for those of us getting residency in 2020 (as I understand it )

Quick question regarding qualifying for the NHR scheme:

If one has no foreign income (solely intending to work here in a declared profession) and lives here full time, will one still qualify?
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Old Mar 27th 2021, 1:49 pm
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Default Re: NHR 20% Flat Rate - Again

Originally Posted by campos View Post
On the back of this thread - this year's application deadline is looming next week for those of us getting residency in 2020 (as I understand it )

Quick question regarding qualifying for the NHR scheme:

If one has no foreign income (solely intending to work here in a declared profession) and lives here full time, will one still qualify?
As I understand it the NHR gives you a certain tax status where by IF you have foreign income it is taxed in a certain way (and perhaps not at all if Resident in 2020 or before) and any PORTUGUESE income is taxed in a certain way (at 20% if you come into the correct category - type of profession). So you do not NEED to have foreign income to qualify for NHR.
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Old Mar 27th 2021, 7:11 pm
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Default Re: NHR 20% Flat Rate - Again

Thanks RA.
What's the opinion on the country I should enter from the drop down menu - citizenship (British), or country of previous residency (Italy) ?
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Old Mar 28th 2021, 11:25 am
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Default Re: NHR 20% Flat Rate - Again

In similar position.
I was classed as tax resident until 2016.
First I knew of it (considering I lived and owned property in UK from 2009) was when I went to Financas after having bought a plot of land in Portugal.
I was registering the aquisition as a UK resident.
But NO....they said you are already Portuguese Tax resident and have been since 2005, your address is Portugal.
As it transpired it was my old accountants address, which was considered as mine (it was and still is a shop in a parade of shops).
She was supposed to have changed all my details when I reinvested in UK after selling a house in Portugal. Gave her all UK registration and cost of UK property to show to Portuguese Financas that I had reinvested what I said I would.
Been advised by a few accountants that it is very difficult to change tax residency retrospectively, unless you can prove you were Tax resident somewhere else.
I could not do that as I did not file a tax return in UK because I did not need to do.
Being able to provide council bills or electricity bills is of no use.
So my idea of becoming resident and NHR in 2017 was a non starter, being considered to be tax resident in the previous 5 years, despite not living working or owning any property in Portugal.
So now 5 years later and now a resident in Portugal (taken out in 2020), I was keen to find out why (if they considered me to be tax resident, but had not filed a tax return in Portugal between 2009 and 2016) then why had I not been fined or heard anything from the Financas......and if not then surely that meant that they had in fact considered my old accountant as a tax representative, as the reinvestment was made in 2009 and the CGT tax paid in 2010, and not me as Tax resident in that time.
A new accountant (supposedly very good company) has gone through my records, and are simply saying, Become Tax resident now, and then apply for NHR which you can do for either 2021 or 2022 !!!!
This is in total contrast to what I have been told before.
Have a phone call meeting with this company on Tuesday, I am sure not certain that what they are telling me is correct. Great if it is, but could cause a prob if its not.
Thats how easy it is to get in a pickle.
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Old Jun 3rd 2021, 9:29 pm
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Default Re: NHR 20% Flat Rate - Again

Has it gone up? Last time I looked the NHR flat rate was 10%.
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Old Jun 4th 2021, 6:27 am
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Default Re: NHR 20% Flat Rate - Again

Originally Posted by J00ls View Post
Has it gone up? Last time I looked the NHR flat rate was 10%.
That's the rate on pensions - the OP is referring to earned income.
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Old Jun 4th 2021, 8:50 am
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Default Re: NHR 20% Flat Rate - Again

Thanks - the new things to learn here just go on and on!
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Old Jun 4th 2021, 12:55 pm
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Default Re: NHR 20% Flat Rate - Again

Originally Posted by wellinever View Post
In similar position.
I was classed as tax resident until 2016.
First I knew of it (considering I lived and owned property in UK from 2009) was when I went to Financas after having bought a plot of land in Portugal.
I was registering the aquisition as a UK resident.
But NO....they said you are already Portuguese Tax resident and have been since 2005, your address is Portugal.
As it transpired it was my old accountants address, which was considered as mine (it was and still is a shop in a parade of shops).
She was supposed to have changed all my details when I reinvested in UK after selling a house in Portugal. Gave her all UK registration and cost of UK property to show to Portuguese Financas that I had reinvested what I said I would.
Been advised by a few accountants that it is very difficult to change tax residency retrospectively, unless you can prove you were Tax resident somewhere else.
I could not do that as I did not file a tax return in UK because I did not need to do.
Being able to provide council bills or electricity bills is of no use.
So my idea of becoming resident and NHR in 2017 was a non starter, being considered to be tax resident in the previous 5 years, despite not living working or owning any property in Portugal.
So now 5 years later and now a resident in Portugal (taken out in 2020), I was keen to find out why (if they considered me to be tax resident, but had not filed a tax return in Portugal between 2009 and 2016) then why had I not been fined or heard anything from the Financas......and if not then surely that meant that they had in fact considered my old accountant as a tax representative, as the reinvestment was made in 2009 and the CGT tax paid in 2010, and not me as Tax resident in that time.
A new accountant (supposedly very good company) has gone through my records, and are simply saying, Become Tax resident now, and then apply for NHR which you can do for either 2021 or 2022 !!!!
This is in total contrast to what I have been told before.
Have a phone call meeting with this company on Tuesday, I am sure not certain that what they are telling me is correct. Great if it is, but could cause a prob if its not.
Thats how easy it is to get in a pickle.
You can apply for NHR if you have not been tax resident in Portugal for the last 5 years . One of the things you can do at Finanzas is ask for your last 5 years tax returns which should all be zero .
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Old Jul 30th 2021, 10:33 pm
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Arrow Re: NHR 20% Flat Rate - Again

Originally Posted by sherbert View Post
I obtained a NIF in November using a UK address.

I arrived in PT at the very end of December and gained residency (CURE) before 31st.

I was only able to change my address on Financas in early February, because, you know, mindless Portuguese bureaucracy.

I need to register for NHR (20% flat rate - I fall into one of the categories). I am, however, unable to register for 2020 because my address was not a PT one in 2020, even though I became a resident in 2020.

I was under the impression that one becomes a tax resident as soon as one becomes a resident.

But if I am unable to apply for NHR for 2020, and apply for 2021 only am I going to get into trouble with the tax authorities? Will they say 'you should have applied in 2020 as that's when you became a resident'.

Anyone have any insight. I contacted some tax lawyers/accounts but no one is responding, because, you know, Portugal.
Originally Posted by wellinever View Post
In similar position.
I was classed as tax resident until 2016.
First I knew of it (considering I lived and owned property in UK from 2009) was when I went to Financas after having bought a plot of land in Portugal.
I was registering the aquisition as a UK resident.
But NO....they said you are already Portuguese Tax resident and have been since 2005, your address is Portugal.
As it transpired it was my old accountants address, which was considered as mine
(it was and still is a shop in a parade of shops).
She was supposed to have changed all my details when I reinvested in UK after selling a house in Portugal. Gave her all UK registration and cost of UK property to show to Portuguese Financas that I had reinvested what I said I would.
Been advised by a few accountants that it is very difficult to change tax residency retrospectively, unless you can prove you were Tax resident somewhere else.
I could not do that as I did not file a tax return in UK because I did not need to do.
Being able to provide council bills or electricity bills is of no use.
So my idea of becoming resident and NHR in 2017 was a non starter, being considered to be tax resident in the previous 5 years, despite not living working or owning any property in Portugal.
So now 5 years later and now a resident in Portugal (taken out in 2020), I was keen to find out why (if they considered me to be tax resident, but had not filed a tax return in Portugal between 2009 and 2016) then why had I not been fined or heard anything from the Financas......and if not then surely that meant that they had in fact considered my old accountant as a tax representative, as the reinvestment was made in 2009 and the CGT tax paid in 2010, and not me as Tax resident in that time.
A new accountant (supposedly very good company) has gone through my records, and are simply saying, Become Tax resident now, and then apply for NHR which you can do for either 2021 or 2022 !!!!
This is in total contrast to what I have been told before.
Have a phone call meeting with this company on Tuesday, I am sure not certain that what they are telling me is correct. Great if it is, but could cause a prob if its not.
Thats how easy it is to get in a pickle.
I came across this thread from earlier this year. This is VERY informative. In another recent thread we were debating what the rules are for becoming a tax resident (ie. 183 days in a 12 month period; establishing a habitual residence, someone mentioned the importance of the date 31st of Dec, etc.) . Well, it seems in practice people are being classed as tax residents, or not, based on the address the Financas has...that's all! In a way it makes sense because with the Schengen area it's too difficult and costly and time consuming to track how many days a foreigner spends in Portugal as well as whether they are visitors or habitual residents. Anyway, this is very very important to know.
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Old Jul 31st 2021, 4:27 am
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Default Re: NHR 20% Flat Rate - Again

As a follow on for you. I took Residency in Dec 2020.
Advised to go to Financas to change to Port, Tax residency address in March, and to ask for that to start in March 2021.

Was told at Financas that it has to be the same date as when residency began (ie 2020)
So came away without doing anything.

Found another new accountant in June, who took all of my details CRUE etc.
He corresponded with AT online or phone, and on 1st July told me that AT had changed my Fiscal address from 1st July 2021.(date of CRUE is in fact in 2021).
But at same time told me that because they has started my Tax residency on 1st July that I will be liable for tax in Portugal on ALL income in 2021, not just half year.

But it means that I can apply for NHR any time between Dec 2021 and March 2022.......(that would be after a 5 year break from Tax residency in Nov 2016).
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Old Jul 31st 2021, 6:02 am
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Default Re: NHR 20% Flat Rate - Again

Similar situation.
Non-resident NIF in July 2020
CRUE in November 2020
Resident NIF early 2021
No PT income for 2020. Tax advisor said no tax return necessary for last year. This was confirmed via the portal by the tax authorities. Not sure where I stand re. NHR though. Regardless, don't think I'd qualify in any of the jobs on the list.
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