Despite an increase of three tenths, Portuguese taxation remained below the European average last year. In Portugal, the weight of taxes reached 40.2% of GDP and in the Euro Zone, 41.4%. France had the heaviest load (48.4%) and Ireland the lightest (23.5%).
Non-Habitual Resident migrants nearly double
Improved conditions and generous tax breaks have attracted more foreigners to Portugal in the last year and a half. The increase in the number of Non-Habitual Residents was 83% over the period, currently totalling 23,767 with NHR status. The rise is mainly from France, Italy and the UK. Emigrated Portuguese nationals are also returning but only account for 6% of the total.
Due to a pending change in the French government’s interpretation of domestic law, national migrating pensioners may soon be classified as still being resident for tax purposes in France if they join the Non-Habitual Resident (“NHR”) scheme in Portugal. Under the new reading, the 10-year exemption granted to retirement pensions under NHR creates a double tax waiver that contradicts the application of the Double Taxation Agreement (“DTA”), thereby negating any change in French residency status. To avoid on-going assessment in France, French migrants should establish their “centre of economic interests” in Portugal as well as have other sources of taxable income in Portugal.
La France se prépare à attaquer l’exonération des pensions de la RNH
Grâce à un changement imminent dans l’interprétation de la législation nationale par le Conseil d’État, les retraités nationaux émigrés au Portugal pourraient bientôt être classés comme étant toujours résidents fiscaux en France s’ils adhèrent au régime de Résident Non Habituel portugais. Selon la nouvelle lecture, l’exonération de dix ans accordée aux pensions de retraite dans le cadre de la RNH crée une dispense fiscale qui contredit l’application de l’accord de double imposition, annulant ainsi toute modification du statut de résident en France. Pour éviter que les évaluations fiscales continuent en France, les migrants français devraient établir leur «centre d’intérêts économiques» au Portugal et disposer d’autres sources de revenus imposables au Portugal.
France is the EU country with the highest number of tourist beds available. According to 2016 data collected by the European Statistical Office, the French tourist industry registered 5.1 million beds or 16.4% of the EU total. Italy ranked a close second with 4.9 million beds (15.8%). Spain placed third with 3.5 million beds or 11.2%. Over the same period, Portugal recorded approximately 567,800 tourist accommodations, an increase of 16,100 beds (+3%) when compared to the previous year.
Currently, more than 2.3 million Portuguese live abroad or 22% of the population. After Malta, Portugal is the European country with most emigrants. In 2015, the latest year of available statistics, the main destination was the United Kingdom with 32,301 Portuguese entries, followed by France with 18,480, and Switzerland with 12,325. Moves to Germany numbered 9195 and Angola 6715.
France and Portugal have agreed to alter the bilateral tax treaty between the two countries. The changes reflect the OECD recommendations regarding the exchange of fiscal information under the Common Reporting Standard.