Imogen CalderwoodSPAIN’S dominance of the European expat scene could be under threat from Portugal.
Portugal looks to be zeroing-in on the expat market, with a new tax scheme.
The tax exemption scheme applies to non-regular residents in Portugal and eliminates double taxation of foreign sources of income, including pensions.
For working residents with high professional value – such as architects, artists, doctors, professors, engineers and technicians – a special 20% tax rate applies.
People who have not lived or paid tax in Portugal for the past five years are eligible and would not have to pay taxes on their pension for the first 10 years of residency.
Meanwhile, the tax regime would only apply to citizens for a period of 10 consecutive years.
Spain’s equivalent scheme lasts only five years, while the rate for professionals is an unattractive 24%.
To get these benefits, people must not have had tax residency in Spain for the previous 10 years, compared to just five in Portugal.
The Portuguese scheme was introduced in 2009 but is now being taken up in earnest, particularly by French and Swedish expats.
Estate agencies in Portugal are recording increased demand from the UK with the Germans expected to follow.
The Portuguese unlike the Spanish government obviously recognise the financial benefits ex pats bring to the country and want some more of it.
As I have said on the OP before, Portugal will clean up and become the main beneficiary of Spain’s stupidity, mismanagement, horrendous property laws and crippling, business ruining tax regime.
I wish Portugal and all those who relocate there the very best of luck. I sincerely hope that the Portuguese authorities take a long hard look at where Spain went so desperately wrong and learn by their mistakes.
In the meantime, Spain needs to have a major charm offence, taxation overhaul, a property amnesty and a re-branding exercise before it disappears down the plughole.