The Non-Habitual Residents (NHR) Tax Regime and the Classification of High Added Value Activities (AEVA)

The NHR Regime was revoked with effect from 1 January 2024. However, applications for registration remain open until 31 March 2025, allowing eligible individuals to avail themselves of the scheme. For those already benefiting from it, numerous legal uncertainties persist, particularly regarding the classification of AEVA. The Portuguese Tax Authorities have received multiple binding rulings requests seeking clarification on these matters.

In this sense, this article focuses on Binding Ruling no. 26332, which examines the case of a taxpayer registered under the NHR regime from 2023. The individual, employed as a Senior Developer, sought confirmation as to whether his activity falls within code 25 of Ordinance no. 230/2019, relating to “Information and Communication Technology Specialists.” The taxpayer submitted supporting documentation, including an employment contract and a declaration from his employer outlining their professional duties. Tax Authorities confirmed that the activity falls within subcode 2512 of the Ordinance, thereby enabling the taxpayer to benefit from the regime’s tax advantages, provided that strict compliance with the eligibility criteria is maintained throughout the 10-year period.

Notwithstanding the revocation of the regime, Tax Authorities have clarified that taxpayers who complete their registration by 31 December 2024 may continue to benefit from the scheme, subject to continuous and rigorous compliance with the documentary requirements prescribed under Ordinance no. 230/2019.

As Fernando Pessoa aptly observed, “to navigate is necessary.” In the realm of taxation, foresight and adherence to compliance obligations are paramount. The NHR regime remains an attractive proposition but necessitates meticulous record-keeping and strict regulatory compliance to secure and ensure their continued navigation in this regime.

Joana Ribeiro Pacheco from the Tax department at Cerejeira Namora, Marinho Falcão.