Portugal court ruling puts NHR holders at risk for 20% tax rate claims

What the Constitutional Court struck down

Portugal's Constitutional Court ruled parts of the Non-Habitual Resident tax framework unconstitutional in Acórdão n.º 366/2026, issued April 21. The decision targets the 20% flat rate on self-employment income for certain "high value-added" professions.

The court found that Parliament improperly delegated to the government, through a ministerial Portaria, the power to define which professions qualify for the reduced rate. Tax benefits must be defined in statute, the judges held, not left to executive lists.

Two provisions fell: Article 72(10) of the Personal Income Tax Code (in the portion delegating the definition of qualifying activities) and the line in Portaria 12/2010 classifying "directors of administrative and commercial services" (CPP code 12) as high value-added work.

Who carries the most risk

NHR holders earning category B self-employment income under CPP code 12 sit in the direct line of fire. Their qualifying profession code has been declared unconstitutional, opening the door to denied 20% claims in any open inspection, appeal or arbitration.

Other NHR freelancers listed in the Portaria face indirect risk. The court did not invalidate the full table, but its reasoning gives the Tax Authority grounds to challenge other profession codes case by case.

The successor regime, IFICI (also called NHR 2.0), wasn't ruled on and remains in force. Its design relies on the same delegation model and for 2024 applications it imported the Portaria 12/2010 table directly, so applicants in flagged roles could see similar challenges later.

Tourists, short-term visitors and residents taxed under standard rules are unaffected. Employment-income NHR beneficiaries (category A) sit outside the formal scope of the ruling.

Steps for affected residents

The ruling doesn't automatically strip existing NHR status or reopen past assessments. Within the standard four-year assessment window, however, the Tax Authority can invoke the unconstitutionality against pending claims.

Current NHR holders under category B should:

• Confirm which profession code their NHR registration relies on
• Review any open inspections, reclamação graciosa filings or arbitral cases for exposure
• Speak with a Portuguese tax adviser before filing the next IRS return, particularly if registered under CPP code 12
• Keep documentation supporting the substantive nature of their activity, not just the code

IFICI applicants for the 2024 tax year should track follow-on litigation before assuming their delegated eligibility list is secure.

Read our full Portugal guide for the complete picture or browse more nomad news for the latest changes.