• Home
  • About
  • Content categories
  • Masterlist

DSG – in the pipeline

~ Dennis' latest work assembled here

DSG – in the pipeline

Monthly Archives: April 2020

NHR – 2020 State Budget requires a minimum tax of 10% for foreign pensioners

27 Monday Apr 2020

Posted by Ursula in Posts

≈ Comments Off on NHR – 2020 State Budget requires a minimum tax of 10% for foreign pensioners

Expatriates to pay at least €7,500 in income tax per year on foreign sourced pensions

With the proposed NHR changes in the 2020 State Budget, promoting Portugal as the “Florida of Europe” might soon become more difficult. Foreign pensioners who join the non-habitual residency scheme  (NHR) in the future will lose the double tax exemption and will be required to pay a 10% tax rate in Portugal with a minimum assessment of €7,500 per annum. However, the intention is not to drive away wealthy foreign fiscal residents from a regime that has earned for Portugal many millions of real estate and other taxes.

The new requirements will only apply to future applicants who request NHR status after the 2020 State Budget becomes passed into law. However, it is also possible for those who have already joined the NHR scheme to opt for this limited taxation. Paying this minimum tax in Portugal provides a window of opportunity that may prove valuable to Finns, Swedes and others who are at risk being taxed in their countries of origin at much higher tax rates.

Background

NHR emerged in 2009 as a way to attract highly skilled individuals to Portugal in exchange for a flat-rate assessment of 20% rather than the high tax rate of 48%. However, the scheme also provides a generous framework for foreign pensioners who benefit from a 10-year “IRS” exemption on pensions received from abroad. As tax residents in Portugal, these fiscal migrants no longer pay tax in the country of origin. It is this double exemption that continues to prove seductive to many foreigners. It is also this double exemption that leads to Portugal being accused of promoting unfair tax competition. To restore a level playing field, opponents to the NHR tax exemption have proposed the 10% minimum income tax rate.

Existing Pension Exclusion

Under the Portuguese tax code (“CIRS”), contributions to pension plans are normally considered to be capital. In other words, these contributions have already satisfied tax obligations in the fiscal year in which they were made.  Only the subsequent growth of the Pension Fund is taxable upon withdrawal. When the appropriate statutory criteria have been satisfied, 85% of pension income may be excluded with the remaining 15% liable for assessment.

Example: As habitual residents (living in Portugal more than 183 days per annum), a couple, each earning €75,000 in pensions, will have a total gross tax before deductions of just €2,000 (1.33%) on their total income of €150,000 after exclusions.

With tax treatment like this on the books for decades, who needs the confusion and disarray of the Non-Habitual Resident status in the first place?

Minimum wage increases in 2020

06 Monday Apr 2020

Posted by Ursula in Briefs

≈ Comments Off on Minimum wage increases in 2020

Tags

2020, minimum, portugal, wage

The national minimum wage in Portugal rises from €600 to €635 in 2020, a measure that should benefit 720,000 workers. The modification translates into a net salary increase of €31.13 per month (in 14 payments per annum). This basic salary is tax-exempt from Individual Income Tax (IRS). Workers pay only 11% in Social Security contributions. In the EU, the monthly national minimum wage ranges from a high of €2,090 in Luxembourg to a low of €312 in Bulgaria.

Portugal registers 27 million tourists in 2019

06 Monday Apr 2020

Posted by Ursula in Briefs

≈ Comments Off on Portugal registers 27 million tourists in 2019

Tags

2019, portugal, tourists

In 2019, tourist establishments registered 27 million guests and 69.9 million overnight stays, corresponding to annual increases of 7.3% and 4.1%  respectively, according to preliminary data from the National Statistics Institute. Of these registered guests, 10.7 million correspond to residents in Portugal and 16.3 million to visitors living abroad.

97% of Golden Visas are from acquiring properties on Portugal’s coast

06 Monday Apr 2020

Posted by Ursula in Briefs

≈ Comments Off on 97% of Golden Visas are from acquiring properties on Portugal’s coast

Tags

golden visa, lisbon, oporto, porto, portugal

The Government wants to end the granting of Golden Visas for third-country nationals purchasing real estate in the greater metropolitan areas of Lisbon and Oporto. In the seven years since its inception, the plan has barely touched the interior districts of the country. Historically, the concession of Golden Visas has accounted for just 3% of applications to the programme.

Subscribe

  • Entries (RSS)
  • Comments (RSS)

Archives

  • September 2021
  • June 2021
  • May 2021
  • April 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • September 2016
  • August 2016
  • July 2016

Categories

  • Article
  • Articles
  • Briefs
  • Brochure
  • Posts
  • Shorts
  • Uncategorized

Meta

  • Register
  • Log in

Blog at WordPress.com.

  • Follow Following
    • DSG - in the pipeline
    • Join 74 other followers
    • Already have a WordPress.com account? Log in now.
    • DSG - in the pipeline
    • Customize
    • Follow Following
    • Sign up
    • Log in
    • Report this content
    • View site in Reader
    • Manage subscriptions
    • Collapse this bar