Do Digital Nomads Pay Tax in Portugal in 2024?

One of the most common questions we receive at Nomads Embassy when someone wants to relocate and work remotely from Portugal is, “Do digital nomads pay tax in Portugal?”

The short answer is yes, digital nomads pay tax in Portugal but only if they meet certain requirements. 

If you are interested in applying for the Portugal digital nomad visa and living in Portugal for one year or more, then you will become a tax resident. Therefore, as a digital nomad living in Portugal, you must pay taxes. 

Until recently, January 1, 2024, to be exact, Portugal implemented a favorable tax incentive for digital nomads and foreigners living in the country called the Non-Habitual Residence Program or the NHR. Unfortunately, the program has been amended and does not include digital nomads under the regime moving forward. 

So, with this change in the tax environment for digital nomads, we’ve put together a brief guide answering the popular question, do digital nomads pay tax in Portugal? 

Do Digital Nomads Pay Tax in Portugal?

Portugal is not a tax-free country for digital nomads. While there are some countries that offer digital nomad visas with no tax, Portugal is not one of them. 

There are two main criteria digital nomads must fall under in order to be considered a tax resident in Portugal and pay tax to the country. 

The first is if they are present in Portugal for 183 days out of the year. 

The second is if they have an official residence and domicile in Portugal. 

183-Day Rule: Territorial Tax

A digital nomad will automatically become a tax resident in Portugal if they spend 183 days or more in the country in a 360-day period. This is regardless of whether you are an official resident of Portugal. 

It’s important to understand that if you are a digital nomad changing countries every few weeks and you stay in Portugal for less than 183 days, then you are not subject to pay local taxes. 

Habitual Residence in Portugal

A digital nomad with a habitual residence in Portugal is considered a tax resident regardless if they are present for 183 days or more in the country. 

This is often where remote workers who hold the Portugal digital nomad visa qualify as tax residents. They will have a long-term lease for their home and a residence permit allowing them to live in Portugal. 

The End of the NHR Program

We briefly mentioned the Non-Habitual Residence Program at the beginning of this article. 

The NHR was a favorable tax program allowing foreigners to move to Portugal and become tax residents while taking advantage of a 0% tax on foreign-earned income and a flat 20% tax on income earned within Portugal for ten years. 

At the beginning of 2024, the program ended, and digital nomads no longer qualify for these tax incentives. 

However, individuals who are already part of the NHR program will not lose their tax benefits. Additionally, those who can prove that they started planning their relocation to Portugal (such as applying for the digital nomad visa) before January 1, 2024, can still receive these favorable tax rates. 

Digital nomads who begin relocating to Portugal now will not have the advantage of the NHR program and will be subject to standard tax rates. 

What is the Tax Rate in Portugal for Digital Nomads?

With the end of the NHR program and the special tax rates, digital nomads will be subjected to normal residence tax rates. 

In Portugal, the residence income tax rates range between 14.5% and 48% in 2023. 

Your individual tax rate will depend on the amount of income you earned in a single year and if you are married. For example, those earning between 15,922€ and 20,700€ will have a tax rate of 28.5%.  

Paying Taxes in Portugal as a Digital Nomad

Now that we have determined that digital nomads pay tax in Portugal when you live there with a digital nomad visa or residence permit, how exactly do you pay these taxes? 

The Portuguese tax system is a self-reporting system. This means that you must file your taxes in Portugal each year. (We recommend speaking to a certified accountant specializing in expat taxes in Portugal when you do this!)

To file your taxes, you will need to acquire an NIF number. This is an identification number the Portuguese authorities associate with individuals when paying taxes. 

How to Obtain an NIF Number

There are three ways to obtain an NIF number for Portugal.

1. Online
2. In-Person
3. Through an Attorney

The process is completely free when you apply directly through the Portuguese authorities for your NIF number. 

When applying in person, you must make an appointment at a local tax office in Portugal. 

If applying online through the Portuguese authorities, you may use their online portal.

Otherwise, if you are working with Nomads Embassy’s hand-selected local immigration lawyers, they can apply for your NIF number for you as part of our Done-for-You Digital Nomad Visa Service. 

If you are already a resident in Portugal applying for an NIF, then you must present your passport and your residence permit. 

If you are a non-resident of Portugal and need to apply for an NIF, then you must present your passport and have a fiscal representative in Portugal. 

Self-Employed Tax in Portugal

If you’re working as a self-employed individual as a resident in Portugal, paying taxes looks a little different. 

Instead of paying one lump sum once a year, you will pay quarterly taxes on your projected income for the year. 

Digital nomad freelancers living in Portugal may fall into this category. We highly encourage seeking professional advice and assistance with your taxes if this is the case! 

How Much Tax Do Digital Nomads Owe in Portugal?

Before choosing a digital nomad visa and moving abroad, one of the most important things to consider is how much you will pay in taxes in your new country. For those digital nomads from countries with lower tax rates, such as the United States, paying a higher tax on your wage may deter you from relocating to a certain country. 

Unfortunately, we cannot provide a firm answer to how much tax digital nomads pay in Portugal. However, we can provide the sliding tax rate scale as of 2023. 

Taxable income (EUR*)		Tax rate (%)	Deductible amount (EUR)
Over	Not over
0	7,479	14.5	0
7,479	11,284	21.0	486.14
11,284	15,992	26.5	1,106.73
15,992	20,700	28.5	1,426.65
20,700	26,355	35.0	2,772.14
26,355	38,632	37.0	3,299.12
38,632	50,483	43.5	5,810.25
50,483	78,834	45.0	6,567.33
78,834		48.0	8,932.68

This can help provide some idea of the tax rate you’ll pay as a digital nomad. 

If you relocate to Portugal with a digital nomad visa, then you must earn at least 39,360€ per year,  putting you in the 43.5% tax bracket. 

However, there may be other tax incentives and deductions you can take as a foreigner living abroad in Portugal. Speaking with a certified accountant specializing in digital nomads and expats living in Portugal can guide you to take these discounts and credits. 

How to Move to Portugal as a Digital Nomad

There are two visa options for digital nomads to relocate to Portugal and become residents. 

Portugal Digital Nomad Visa (D8)

Officially known as the D8 visa, the digital nomad visa allows remote workers, whether they are employees, freelancers, or business owners, to move to Portugal. 

Applicants must earn at least 3,280€ per month working remotely and have access to at least 9,840€ in a bank account. 

The visa allows applicants to include a spouse and dependents and grants either a one-year stay or a two-year renewable residence permit. 

See if you qualify for Portugal’s digital nomad visa now! 

Passive Income Visa (D7)

Portugal offers a D7 passive income visa for digital nomads and retirees who no longer work and can support themselves. Qualifying income includes investment returns, dividends, pensions, and rental income. 

Those earning at least 900€ per month in passive income and can deposit 12,000€ in a Portuguese bank account may apply for Portugal’s D7 visa. 

See if you qualify for Portugal’s D7 visa now! 

Get Assistance with Your Portugal Visa Application with Nomads Embassy

Now that you have some more insight into whether digital nomads pay tax in Portugal, you may feel more comfortable about your choice to relocate there. 

If you think foreign taxes are difficult and overwhelming, just wait until you encounter the bureaucracy of applying for a visa! 

Portugal’s digital nomad visa application consists of a visit to a Portuguese consulate or embassy in your country of residence, collecting, certifying, and translating documents, and ensuring all of your plans line up. 

We can’t tell you how many digital nomads abandon their application halfway through! 

When you work with Nomads Embassy’s hand-selected local immigration lawyer partners, you’ll experience a stress-free, smooth digital nomad visa application process. 

With our Done-for-You Digital Nomad Visa Service, you’ll have a helping hand throughout the entire process. Imagine having all of your questions answered and legal guidance to ensure a smooth relocation. 

Request our free digital nomad visa eligibility assessment to see if you qualify for Portugal’s digital nomad visa today!