Different PT judges take different views of non-resident rights, same as what I wrote earlier. Spin the roulette wheel and see which one you get.
If your original suit was not about protecting your rights, what was the crux of it? The lawyers Iâve talked to seem to all lead with âviolation of rightsâ from the start.
Correct, but my understanding is that the failure of the original proceeding was on urgent vs non urgent, not on the merits.
I need clarification, but I believe the injunction process is a way to get a faster ruling than a normal case, but without having to demonstrate itâs urgent up front. But as worded, youâre rightâthe same issue may arise. Maybe itâs just a way of filing a new case.
Will update once my lawyer clarifies.
For US citizens, If you have declared tax residency in Portugal, Portugal gets the first bite at collecting your taxes and then you get a credit for those taxes paid in the US. If youâre not in fact residing there, the US is losing taxes it is entitled to.
The only option would be to accept the double taxation and pay full tax in both countries. Not much of a benefit thenâŠ.
No, thatâs not how it works. Portugal will get the first right to tax you on all your income you generated in Portugal. That is, if you were (hypothetically) working for United Airlines at Humberto Delgado Airport, you will be taxed on your income in Portugal first. The U.S. will then give you credit for taxes paid when you file your U.S. tax returns. However, if you are generating income in the U.S., Portugal will only be allowed to tax you after you met your U.S. tax obligations. Portuguese tax forms will expressly ask where income was generated, what type of income, and how much was taxed in the source country. Typically your U.S. tax obligation will exceed Portuguese NHR tax brackets, with the exception of long term capital gains, where you might owe PT additional 8% (U.S. - 20%, PT - 28%).
The advantage of NHR is that most of your Portuguese income would be taxed at reduced rates (flat 20%), and many income streams, such as dividends and interest in the U.S., are completely exempt in Portugal. It is well worth getting it this year if you think you would be moving to Portugal in the next 10 years.
Remember, you only have to become a tax resident in Portugal before the end of 2024, and you can do it with just a GV application on-file and proof of residency (i.e. either a rental contract or a deed to a property). With this document, you can get Atestação de ResidĂȘncia from your local Junta de Freguesia for a nominal price (under 10 âŹ), though, depending on specific requirements, you might need couple of Portuguese neighbours to sign you petition to Freguesia. Submit this document to Finanças to change your fiscal residency address (and eliminate your fiscal representative). The next day, just click couple of boxes to apply for NHR, and you are done!
Total cost of the process to me was 7.35 âŹ, plus aggravation of standing in line to Finanças. If you are not living in PT yet, you might need to enlist someone to help you here locally.
Just FYI, we filed our first PT tax returns this year. The grand total in PT - 0 âŹ. U.S. is much happier with our return thereâŠ
Thanks for all this detail. Very interesting. Two different law firms have told me the chance of getting tax residency and NHR prior to pre-approval (weâre Dec. â22 applicants) were very low. One firm that is promoted on this platform has advised us to abandon our GV applications and file new D7 apps and then with those approvals (assuming we get them, of course), apply for NHR. (Their fee for NHR for 3 of us: âŹ6000).
Honestly, just stop collecting more legal advice on this NHR thing and instead just apply while it is available 
I was going to write a reply but @PCERoman already provided an excellent âhow-toâ guide in his post above.
Thatâs exactly how tax filing works under NHR, you are very likely to pay 0⏠in PT if you donât generate PT-sourced income.
Okay but this could be quite a lot right? And what about things like 401ks and IRAs, does Portugal recognize those as non-taxable or does it try to tax gains if you sell within those accounts?
What if you sell a house? The US gives you 500k gains tax free (if youâre married), will Portugal try to tax you on that 500k?
What about exit tax? If you cease Portugal tax residency I believe you have to pay unrealized gains on all your worldwide assets?
If there were no gotchas I guess I should get NHR because at least if our minor kids are refused citizenship, we would have the option of moving to PT for a few years to âproveâ their connection and guarantee their citizenship.
But with gotchas Iâm not sure itâs worth it.
I think the exit tax is misunderstood. Google it and read a reliable source - does not appear to apply to an individualâs worldwide assets, but only to a specific situation where youâve owned shares in a company thatâs been subject to an exchange, merger or division. Seems like it would be more relevant to business owners in Portugal whoâve been through some M&A activity.
One good side effect of getting too much legal advice: the NHR seems to entirely exempt proceeds from the sale of US-based real estate (including your primary residence) from PT taxation (still taxed in US). But I understand without NHR, youâd be subject to tax on 50% of the capital gains at the normal progressive rates (plus a possible solidarity tax, if your gains are high enough). Itâs one of the things that makes me think we NEED NHR.
Presumably, even if you have NHR, you are not liable for PT taxes if you are not a PT resident for more than 183 days during the year.
We have NHR this year, but are still waiting in the residency process.
Depends on your LTCG bracket - for some of us, we might be in the 0 or 15% bracket - having to âtop upâ to 28% is quite the hit in those circumstances!
If youâre in the 20% bracket, youâre making quite a lot more than most people with cap gains
https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates#:~:text=filed%20in%202025).-,Filing%20status,20%25,-Single
Ahh making more than most meaning one should be happy to pay whatever taxes?
There are always âgotchaâsâ, and should plan around it. Remember, just because you are NHR, it does not mean that you are tax resident of PT for the entire 10 years. You can, after few years down the road, inform Finanças that your tax base is not going to be PT for few years. The U.S. will chase you for taxes anywhere in the world, PT will not. You are only on the hook if you spend 183+ days per year here. Your NHR status does not go away if you âmoveâ outside of PT during its validity.
I donât have experience with IRA withdrawals yet, and I donât have a 401K. I do know that PT will tax your social security income, treating it as a pension, at a flat 10% under NHR. From what I understand, RothIRA withdrawals are treated as pensions in PT (10%). Standard IRA withdrawals are treated as ordinary income in the U.S., hence Uncle Sam will get his fair share, and most likely PT will get nothing under the NHR.
I donât think PT will recognise the 500K exemption in the U.S., and so you might want to plan the sale in light of the aforementioned physical presence for tax purposes. Within PT, you get three years to re-invest your real-estate related capital gains into another primary residence and avoid taxation. Also, PT will only tax 50% of the actual realised capital gains under certain circumstances, and it appears that under NHR, your foreign capital gains are exempt. You will find more in this here: https://brighttax.com/blog/us-expat-taxes-americans-portugal/
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US Expat Taxes in Portugal: A 2024 Comprehensive Guide
Are you an American living in Portugal? Refer to this complete tax guide to learn about your expat tax obligations, deadlines, and more.
brighttax.com
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I am not aware of PT exit tax. This is one of the great âbenefitsâ of the U.S. if you chose to denounce your citizenship. Yeah, Happy 4th to you too!
These are not firm rules, but planning guidelines. There are always trade-offs. However, with the cost of living in PT, cheap and good, medical help, and frankly - low taxes under NHR, you are often better off here, especially if you are coming from a high-tax state (like CA, MA, NY, etc.). Your results may vary.
True, I was using the worst case scenario. Also, under NHR, many types of cap gains are exempt, and on real-estate transactions, PT seems to apply cap gain tax on only 50% of your net gain. Primary residences might not trigger any at all if the funds are re-invested into another property within three years.
Anyway, this thread is not really about taxes or tax advice, and I am not a CPA or a PT tax expert. 
I would say the 0% tax rate â 28% is worst case, but I get your point!
Ah, my worst-case scenario was âadding insult to injuryâ: first you pay 20% to U.S., and then still more to PT!
I believe another gotcha is that US state taxes are not considered in the tax treaty. So e.g. if you live in California and your capital gains rate is 20% federal + 3.8% NIIT + 10% California, so 33.8% total, Portugal will say âyour federal rate is 20% so you still owe us 8%â which brings your real total to 41.8%.
âŠand thatâs why I am no longer a resident of CA!
I was going to mention this as well. Iâve structured finances such that my income will result in a zero LTCG bite when I dump some heavily appreciated assets (NVidia anyone?). Having to pay 28% on that will hurt.
Iâm in this situation with some QSBS stock. However, my tax advisor and attorneys in PT have confirmed that US sourced capital gains are exempt under the NHR due to some complexities of our taxation treaty, and this has been upheld in court here in Portugal. Even if you paid less (or no) capital gains tax in the US itself on those gains. As long as they are 100% realised in the US on US assets.