2020, at, cae, changes, nhr, non habitual residency, value-added
Beginning in January of 2020, a modified catalogue of business activities comes into force, benefiting a favourable tax regime aimed at attracting professionals with diverse skills to Portugal. These occupational profiles are now extended in light of the difficulties experienced by employers in various sectors in hiring workers since the inception of the Non-Habitual Residency Regime 10 years ago.
The Portuguese Tax Authority (“AT”) has overhauled the qualifying Non-Habitual Residency professions eligible for the 20% flat-rate tax. Doctors, engineers, university professors or specialists in computer and communication technologies remain in the new table. Other occupations, such as psychologists, designers, geologists or archaeologists have been struck off. New professions include activities such as hotel management, catering, trade and other service managers, farmers and skilled agricultural and livestock workers, skilled forestry, fishing and hunting workers or plant and machine operators and assembly workers.
In addition, the new activity table leaves behind the domestic model of the Economic Activity Codes (CAE), adopting a compatible structure based on direct equivalence to the diverse codes of the Portuguese Classification of Professions (CPP). These changes are intended to permit further clarification of interpretative doubts, ensuring greater accuracy in the statistical comparisons at a European and international level.
New Table of NHR high value-added activities
The new table, which takes effect on January 1, 2020, is as follows:
- Professional Activities (CPP codes):
112 General Managers and Executive Managers of Companies;
12 Directors of Administrative and Commercial Services;
13 Directors of Production and Specialized Services;
14 Hotel, restaurant, trade and other service managers;
21 Experts in the physical sciences, mathematics, engineering and related techniques;
2261 Dentists and Stomatologists;
231 University and Higher Education Professors;
25 Information and Communication Technology (ICT) Experts
264 Authors, journalists and linguists:
265 Creative and performing arts artists:
31 Intermediate science and engineering technicians and professions;
35 Information and Communication Technology Technicians;
61 Market-oriented farmers and skilled agricultural and livestock workers;
62 Qualified forestry, fishing and hunting workers;
07 Skilled professionals in construction as well as craftsmen, skilled workers in metallurgy, metalworking, food processing, woodworking, clothing, printing, crafts, precision instrument manufacturing, jewellers, craftsmen, electricity and electronics specialists;
08 Plant and machine operators and assembly workers.
Workers in the above-mentioned professional activities must have at least the European Qualifications Framework qualification level 4 or the International Type of Education Classification level 35 or have five years of duly proven professional experience.
II – Other professional activities:
Managers and managers of companies promoting productive investment provided that they are eligible for projects and with tax benefit concession agreements entered into under the Investment Tax Code.
Net income in categories A and B earned on activities of high value-added, whether scientific, artistic or technical, by non-habitual residents in Portuguese territory, will be taxed at the autonomous rate of 20% with any withholding tax (art. 101) made at the same rate.