New Tax Regime in Portugal: What Changes for Digital Nomads?

New Tax Regime in Portugal: What Is the Impact for Digital Nomads?

The recent Ordinance No. 352/2024/1, published on December 23, 2024, introduces a new regulation for the tax incentive regime for scientific research and innovation (IFICI). This new tax model replaces the previous Non-Habitual Resident (NHR) regime and aims to attract highly qualified professionals to Portugal by offering a special 20% tax rate on income from categories A and B. But what does this change mean for digital nomads?

End of the NHR and the New Taxation for Qualified Professionals

The elimination of the NHR, which for years was one of the main tax incentives for expatriates and digital nomads in Portugal, raises a crucial question: Is Portugal still an attractive destination for remote professionals?

The new regime applies only to certain professional categories, such as engineers, scientists, and IT specialists. To qualify, individuals must meet legal requirements and prove their experience and qualifications. Additionally, registration for the regime must be requested by January 15 of the year following the fiscal residency in Portugal.

Is Portugal Still Worth It for Digital Nomads?

With the end of the NHR, many digital nomads may feel discouraged from choosing Portugal as their base. After all, the country has long been one of the top destinations for those seeking a balance between low tax burden, quality of life, and legal security.

For digital nomads, the challenge goes beyond taxation. For many, the choice of fiscal residency is not just a matter of taxes but also reflects their search for belonging and stability. However, the increased tax restrictions may spark a new migration movement, leading professionals to reconsider their options and seek countries that offer more accessible tax incentives for remote workers.

Alternatives in the European Union

If Portugal is becoming a less favorable destination from a tax perspective, what are the alternatives for digital nomads in Europe?

Spain: The Beckham Law remains an option for foreign professionals, allowing a fixed 24% tax rate on income earned in the country.
Malta: The country offers attractive tax regimes for expatriates, including tax exemption on income earned outside Malta.
Italy: The Regime Forfettario may be an option for small entrepreneurs who want to pay a reduced flat rate on their income.
Andorra: With an income tax of up to 10%, the country has become a haven for digital entrepreneurs and investors.

Conclusion

Ordinance No. 352/2024/1 marks a new chapter in the taxation of expatriates in Portugal. On one hand, the country seeks to attract highly qualified professionals; on the other, the exclusion of a large portion of digital nomads may affect Portugal’s appeal as an attractive destination.

Given these changes, remote professionals must evaluate which countries offer the best tax and legal conditions for their activities. After all, more than just a tax strategy, this decision is directly linked to finding a place that provides security and a true sense of belonging – something that many digital nomads are still searching for.

If you are interested in professional legal services related to Tax Planning, we are a specialized law firm in this area. Feel free to contact us via email: contato@trpuppioadvocacia.com.br