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  • Writer's pictureCreimerman Product Team

Residence Permit in Portugal D7 vs. Non-Lucrative Visa in Spain: A Detailed Tax Comparison




When it comes to settling in Europe, especially for those seeking a welcoming environment, exceptional quality of life, and favorable tax benefits, both the D7 residence permit in Portugal and the Non-Lucrative Visa in Spain emerge as standout options. However, the choice between these two options may heavily depend on the tax implications for each individual. As an immigration firm specializing in tax matters, we're here to provide a deeper comparison, focusing on the tax aspects of both options.



D7 Residence Permit in Portugal:

The D7 residence permit program in Portugal is a popular choice for those seeking a cozy environment and excellent quality of life. This program is designed for individuals with sufficient income to live in Portugal without the need to work in the country.

One of the primary tax advantages of the D7 residence permit in Portugal is the Non-Habitual Resident (NHR) regime, established to attract high net worth individuals and foreign pensioners.

The NHR regime offers significant tax benefits, including exemption from taxes on foreign income and a reduced flat rate on certain types of local income for a period of 10 years. This means that passive income such as pensions, dividends, and foreign royalties may be exempt from taxes in Portugal, while local income will be subject to a reduced flat rate of income tax, resulting in significant tax savings for qualifying residents.

Additionally, Portugal offers a range of other tax incentives, such as exemption from inheritance and gift taxes for certain beneficiaries, as well as competitive property tax rates.



Non-Lucrative Visa in Spain:

The Non-Lucrative Visa in Spain is an option for those wishing to reside in the country without engaging in lucrative activities. This visa requires applicants to demonstrate sufficient economic means to live in Spain without working in the country.

In terms of taxes, Spain does not offer a specific tax regime for non-habitual residents like Portugal.

Residents in Spain are subject to income tax on their worldwide income, meaning that foreign income is also subject to taxes in Spain. However, residents may benefit from certain deductions and exemptions based on their personal situation and prevailing tax laws.



In-Depth Tax Comparison:

When it comes to taxes, the D7 residence permit in Portugal offers a clear advantage over the Non-Lucrative Visa in Spain thanks to the NHR regime.

This regime provides an exemption from taxes on foreign income and a reduced flat rate on certain types of local income for 10 years, which can result in significant tax savings for qualifying individuals.

Furthermore, Portugal offers a range of other tax benefits, such as exemption from inheritance and gift taxes, as well as competitive property tax rates, making it even more attractive from a tax perspective.

On the other hand, Spain does not offer such a favorable tax regime for foreign residents, meaning that residents in Spain may face a higher tax burden compared to those opting to reside in Portugal under the NHR regime.



In conclusion, if you're considering settling in Europe and are concerned about tax implications, the D7 residence permit in Portugal may be the more favorable option due to its NHR tax regime. However, it's important to note that each individual situation is unique, and it's advisable to consult with tax and immigration experts before making a decision. At our firm, we're here to provide expert guidance and help you find the best option for your specific needs and circumstances.




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