Spain, a leader in the European expat scene, now has tough competition from Portugal. With a new tax-scheme, Portugal plans to capture a larger share of this market.
The new Portuguese tax exemption scheme is applicable to non-regular residents in the country and eliminates double taxation of the foreign sources of income, including pensions.
A special 20% tax rate is applicable to working residents with high professional value, like doctors, professors, architects, artists, engineers and technicians.
People who have not lived or paid tax in Portugal in the last five years are eligible. They won’t have to pay taxes on their pension for the first ten years of residency.
In the meantime, the tax regime is applicable only to citizens for a period of ten consecutive years.
In Spain, the tax scheme lasts only five years and the tax rate for professionals is high at 24%. Moreover to get these benefits, people should not have had tax residency in Spain in the last ten years, compared to five in Portugal.
Although the Portuguese scheme was introduced back in 2009 but it is only now that it’s generating interest, especially among French and Swedish expats.
Portuguese estate agencies have recorded increased demand from the UK and expect Germans to follow.
Source: www.theolivepress.es