Digital Nomad in 2025 (Portugal) - Tax Aspects

Digital nomad in 2025: what are the tax advantages and disadvantages in Portugal?

Portugal is one of the most popular countries for tourists, nomads, immigrants and travellers around the world. Even with the extinction of the NHR in 2023, Portugal has remained one of the most popular destinations in Europe.

The 2024 Budget submitted to the Portuguese Parliament at the end of 2025 proposes the extinction of the Non-Habitual Resident (NHR) regime and the introduction of a new tax regime, slightly more restrictive than the previous one, called the Tax Incentive for Scientific Research and Innovation.

I commented on the changes and the transition regime from NHR to the new Tax Incentive regime in this article.

Firstly, let's talk about how Portuguese taxpayers are taxed in general.

Taxes in Portugal

Portugal levies income tax on individuals through the Personal Income Tax - IRS.

All citizens who qualify as tax residents under Portuguese law are obliged to declare and pay IRS.

To do this, they add up all the income earned during a one-year period and apply the following rates, depending on the progressivity of the income (table updated for 2024):

Taxable income	Rates
Up to 7.703€	13,25%
From 7.703€ to 11.623€	18%
From 11.623€ to 16.472€	23%
From 16.472€ to 21.321€	26%
From 21.321€ to 27.146€	32,75%
From 27.146€ to 39.791€	37%
From 39.791€ to 51.997€	43,5%
From 51.997€ to 81.199€	46%
More than 81.199€	48%

Portugal adopts the principle of universality of income. In other words, taxpayers are obliged to declare all their income, regardless of where it comes from. It is therefore extremely important to plan your move to Portugal in advance.

If you are interested in hiring professional legal services related to tax planning for Portugal, we are a law firm specialising in the subject. To do so, please contact by e-mail: contato@trpuppioadvocacia.com.br

However, there is a more beneficial tax regime, currently called the Tax Incentive for Scientific Research and Innovation, which we'll talk about in the next topic.

Tax Incentives for Scientific Research and Innovation

IMPORTANT NOTICE: this tax regime has been updated, I commented on it in this article.

From 2024, the Non-Habitual Resident regime will be replaced by the Tax Incentive for Scientific Research and Innovation regime.

The difference between the NHR regime and the new Tax Incentive regime is the list of economic activities, which will be more restricted.

However, those who fall under the new Tax Incentive scheme will benefit from a flat rate of 20 per cent on income earned in Portugal and an exemption on income earned abroad.

I've commented in detail on the new Tax Incentive regime and its transition in this article.

NOTE: As of the date of publication of this article, this tax regime has not yet been regulated by Parliament.

Madeira Island

Madeira Island is part of the Madeira Free Trade Zone (ZFM), a special tax regime created to promote economic development in the region. Portugal, with the support of the European Union, established this regime with the aim of attracting foreign investment and creating jobs on the island. As a result, Madeira offers a number of tax benefits to companies and individuals who set up business there.

To find out more about taxation on Madeira Island, I recommend reading this article.

Alert to Double Tax Residency

Individuals who have dual tax residency need to declare their taxes for two countries at the same time.

However, what few people realise is that when you are a tax resident in a particular country, the principle of universal income declaration prevails. In other words, taxpayers must declare all their income, regardless of its origin.

What most people do is declare income from Brazil only in Brazil, and income from Portugal only in Portugal. However, by failing to fulfil the duty to declare assets universally, the taxpayer commits a crime called tax evasion.

In addition to the risk of being criminally liable for tax evasion and thus having your passport invalidated, the amounts evaded can be charged to the taxpayer, with interest and a fine.

Brazil and Portugal exchange information on tax matters, given the Convention they signed to avoid double taxation and the long-standing ‘friendship’ between the two countries. This exchange of information is carried out through artificial intelligence, which searches and cross-checks the data of its taxpayers to detect fraud.

Remember: tax evasion is not just a crime in Brazil.

If you are interested in hiring professional legal services to avoid double tax residency, we are a law firm specialising in the subject and we can help you, just get in touch via email: contato@trpuppioadvocacia.com.br