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Clarifying Tax Residency in Portugal: The 2021 Legal Interpretation
The Portuguese Tax Authority's 2021 guidance clarified how tax residency is triggered under the 183-day rule and habitual residence criteria, critical for digital nomads and remote workers.
On 31 March 2021, the Diário da República published administrative guidance issued by the Portuguese Tax Authority clarifying the interpretation of tax residency rules under Article 16 of the Personal Income Tax Code. The guidance reaffirmed that individuals become tax residents if they spend more than 183 days in Portugal within a 12-month period or maintain a dwelling suggesting habitual residence.
The publication provided additional detail on how “habitual residence” is assessed, especially relevant for digital nomads and remote workers who may split their time across multiple jurisdictions. Factors considered include availability of a permanent home, family location, economic interests and duration of physical presence.
For foreign nationals from the UK, US, Brazil, Canada and Israel, this clarification is critical. Many newcomers mistakenly assume that tax residency begins only upon deliberate registration. In reality, residency can be triggered automatically through physical presence.
The 2021 guidance emphasises the importance of pre-arrival planning, particularly for individuals with complex global income structures or corporate holdings.
Official source: Diário da República, Tax Authority administrative guidance, 31 March 2021 (https://dre.pt)