The new regime was approved to start its effect in January, 2024 for individuals who:
(i) have not been tax resident in Portugal for the last 5 years;
(ii) have acquired tax residency in Portugal;
(iii) obtain income from employment or self-employment within the scope of the new regime, encompassing roles like teaching in higher education, scientific research, positions in technology or startups (including board members), highly qualified professions in companies with significant investment applications and jobs in industry and service companies which turnover results, at least, in 50% from exports or yet another activities conducted by tax residents in Madeira or Azores (to be legislated by the Regions).
The benefits under this new regime include:
- A flat 20% tax rate applicable to income from employment and/or self-employment provided within the scope previously mentioned.
- Exemption from taxation on foreign-sourced income, covering employment/self-employment income, dividends, interest, capital gains, and rents.
- These benefits will apply for a 10-year period.
In order for this new regime to entry into force the Government will have to regulate it which should occur in 2024.