Can I Pause NHR if I Leave Portugal Briefly?

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James Cave / Last Updated: February 1, 2023 / Posted in: QandA

Portugal’s NHR (non-habitual residency) tax regime is so good that you will probably want to take advantage of it every year that you’re in Portugal. You can take part for 10 years, but what happens if you have to leave Portugal during those 10 years? Can you pause it and restart the clock?

According to Paula Santos from Tax Team Consulting, the answer is, unfortunately, a no. “It’s 10 consecutive years, and NHR will always count from the first fiscal year in Portugal. You should always apply when you arrive as, even if you don’t benefit from NHR in the first year, a lot can happen in 10 years and you may benefit from NHR in the future.”

10 consecutive years means that the clock will continue ticking even if you decide to leave Portugal for a year or two. For example, if in the middle of that 10-year period, you leave Portugal for 2 years, the clock will continue ticking and you’ll miss out on 2 years. You’ll still be able to take advantage of 8 years under the NHR regime, however, and that’s definitely a good thing.

Paula Santos also says that you should apply for NHR when you arrive. If you’re not working or the type of work you’re doing doesn’t offer you any benefits under NHR, you may not think it’s worth applying for NHR but a lot can happen in 10 years. You may start working again or change careers to a career where your income could be taxed under the NHR regime.

Want to know more about NHR and Portuguese taxes? Take a look at this guide to Portugal’s NHR regime

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