UGLOBAL . COM 11
THE EU ’ S TAX SCHEMES ARE STILL AVAILABLE WITH PORTUGAL ’ S REGIME EXPECTED TO DRASTICALLY CHANGE
BY RAQUEL DE MATOS ESTEVES & INÊS MARQUES DIAS
As individuals and investors weigh their options , understanding the available tax schemes in different EU member states will be crucial in making informed decisions .
Portugal ’ s recent announcement that it was ending its non-habitual resident ( NHR ) tax regime in Portugal , after the approval of the State Budget Law for 2024 , marked a significant change to the system for foreigners who are tax residents in the European country that has been in effect for 14 years . It is also a significant development in the European Union ( EU )' s evolving tax landscape and evidence of the challenge of harmonizing tax policies within the bloc .
POTENTIAL CHANGES TO PORTUGAL ’ S TAX REGIME FOR FOREIGN RESIDENTS
In simple terms , Portugal ’ s NHR regime allows taxation of foreign residents at a fixed rate of 20 % on income from highvalue-added activities , and a fixed rate of 10 % for pensioners . It exempted passive incomes , as opposed to a taxation rate that can go up to 53 % for regular residents .