The End of Portugal's Non-Habitual Residence (NHR) Program Announced

I am looking into this with tax advisors right now because the advice is all over the place. Based on the advice I’ve received so far, this is how I understand it – but I am looking for professional validation or correction:

  1. To obtain tax residency, we must enter into a 1-year lease or purchase real estate before 12/31. We are looking into cost-effective options here.

  2. Once we apply for tax residency, our world-wide wages are taxed in PT, irrespective of where earned. Other types of income are a mix, but wages are taxed (including US wages, irrespective of where we live). This was a surprise.

  3. Once we obtain NHR, our tax rates for various categories of earnings are capped and either low or exempt.

  4. However, irrespective of NHR, wages earned in US are “fully” taxed. This could be an issue for me for 2024.

    a. If I qualify as a “high value occupation”, my wages would be taxed at a flat rate of 20%.
    b. If I am not a “high value occupation”, my wages are taxed along PT’s progressive marginal rate scale (capping at 48% for wages over ~€78,500)

The upshot appears to be this:

If I qualify as high value AND we get NHR, then my US wages, together with our other earnings, will be taxed in PT at a max of 20%. This might be OK once the PT-US tax treaty is applied ( but I am awaiting professional help). If I DON’T qualify as high value, then I’m going to pay much more tax in PT, and only able to offset the US taxes to the extent of the US taxes – so I probably net pay much more in taxes.

Happy to hear what others are seeing and advice they are getting.