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Portugal relaxes tax regulations for expats
| Published: | 18 Aug at 12 PM |
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Expats in Portugal received some welcome news when the country revealed that it was to relax tax regulations for wealthy foreigners residing there.
The Portuguese government put a tax rate in place of 20 per cent on generated income in the country for non-residents three years ago. Although income from their own country was not included in Portugal’s taxation system, many still had to pay taxes in their homeland.
To qualify for this tax rate, expats had to be classed as high net worth individuals (HNWIs) and to have been living in the Iberian country for under five years. They needed to show documentation from a foreign tax authority proving that they had lived overseas and that income generated abroad had been taxed by that authority.
But tax authorities in Portugal have now come to the decision that expats do not have to prove an earlier residency from another country. This will make things easier for expats who have lived around the world, or have complicated tax issues. And with previous employment history, expats only have to sign a declaration stating that they used to live in another country.
The special 20 per cent tax charge is flat and payable at whatever level of income expats have, and is meant to be in place for 10 years. Income taxes for non-expats in the country are tiered between 11.5 per cent and 46.5 per cent.
The Portuguese government put a tax rate in place of 20 per cent on generated income in the country for non-residents three years ago. Although income from their own country was not included in Portugal’s taxation system, many still had to pay taxes in their homeland.
To qualify for this tax rate, expats had to be classed as high net worth individuals (HNWIs) and to have been living in the Iberian country for under five years. They needed to show documentation from a foreign tax authority proving that they had lived overseas and that income generated abroad had been taxed by that authority.
But tax authorities in Portugal have now come to the decision that expats do not have to prove an earlier residency from another country. This will make things easier for expats who have lived around the world, or have complicated tax issues. And with previous employment history, expats only have to sign a declaration stating that they used to live in another country.
The special 20 per cent tax charge is flat and payable at whatever level of income expats have, and is meant to be in place for 10 years. Income taxes for non-expats in the country are tiered between 11.5 per cent and 46.5 per cent.
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