12 UGLOBAL IMMIGRATION MAGAZINE
Until now , Portugal ’ s tax regime is one of the best special tax regimes for individuals in the EU , not requiring any local contract or local source of income to benefit from the special tax rules . It is also relevant to consider that no foreign assets report is needed , and Portugal does not have an inheritance or wealth tax .
In the final draft , the Portuguese government foresaw a transitional period to safeguard the legitimate expectations of applicants who had already initiated their relocation process to Portugal . Therefore , applying for the NHR tax regime in 2024 will still be possible , contingent upon the fulfillment of specific conditions .
In addition , Portugal has introduced a fiscal incentive for scientific research and innovation targeted at taxpayers who have not been residents in Portugal in the last five years and engaged in activities such as teaching in higher education and scientific research . They are considered qualified jobs within the scope of contractual benefits for productive investment or recognized by the Agency for Investment and Foreign Trade of Portugal ( AICEP ) or the Agency for Competitiveness and Innovation ( IAPMEI ). They are regulated by governmental ordinance , employment in certified entities as startups , and jobs or other activities carried out by tax residents in the autonomous regions of the Azores and Madeira , under terms to be defined by regional legislative decree .
The beneficiaries will be subject to a special tax rate of 20 % on the net income of categories A and B earned within the scope of these activities for ten years and exempted on all foreign-sourced income , starting from the year of registration as a resident in Portugal , provided they maintain fiscal residency in the country and annually undertake qualified activities .
HOW DOES PORTUGAL ’ S TAX FOR FOREIGNERS COMPARE WITH OTHER EUROPEAN COUNTRIES ?
Given the legislative gap at the EU level regarding the taxation of European citizens living and / or working outside their home countries , several countries have established special tax regimes to attract individual taxpayers .
In Spain , residents are taxed on income from dependent work at progressive rates ranging from 19 % to 47 %, with the highest bracket applying to incomes exceeding € 300,000 . Under the Special Regime for Posted Workers , commonly known as the Beckham Law , taxable income is subject to a 24 % rate up to a limit of € 600,000 , and beyond this amount , the rate applied is 47 %. As for income from dividends , capital gains , or other income , they are not subject to taxation in Spain if they originate from foreign sources but will be taxed if obtained in Spain .
This regime is applicable for six years ; the first year of residence plus five more years . The individual must not have been a tax resident in the last five years ( previously 10 years ) to benefit from this regime . It also covers the relocation to Spain due to the conclusion of an employment
“ Starting in 2023 , freelancers , remote workers , and entrepreneurs also have tax benefits if they relocate to Spain .
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contract , secondment , or appointment as a director of an entity . Starting in 2023 , freelancers , remote workers , and entrepreneurs also have tax benefits if they relocate to Spain .
Meanwhile , in Italy , income from dependent work is subject to progressive tax rates ranging from 23 % to 43 %, with the 43 % rate applying to incomes starting at € 50,001 . Additionally , there is a regional tax ranging from 1.23 % to 3.33 % and a municipal tax between 0 % and 0.9 %, depending on the municipality of residence . The impatriates ’ regime provides an exclusion from the taxation of 70 % of income from Italian sources , which can go up to 90 % in specific circumstances . This regime is valid for five years and , under certain conditions , the new resident can benefit from the regime for an additional five years , with a 50 % exclusion ( 90 % in the case of impatriates with at least three dependent minor children , among other cases ). However , the proposed 2024 State Budget Law could change the current exclusions to 50 % and restrict the subjective scope .
Italy ’ s tax regime for new foreign residents , introduced by the 2017 State Budget Law , allows paying a fixed amount of € 100,000 in taxes on foreign-source income , regardless of the actual amount received and its transfer to Italy . This alternative can also be extended to family members for an additional € 25,000 per member .
For impatriates , the Italian law requires that the individual has not been a tax resident in the country for the last two years and that they work at least 183 days in Italian territory during each fiscal year . In the case of new residents , the individual cannot have resided in Italy for at least nive of the last 10 years .
The 2019 Budget Law introduced a new tax regime for individuals receiving pension income . It allows individuals who receive pension income from foreign entities , and who change their residence to Italy in certain small municipalities , to opt for a tax regime with an alternative 7 % tax on foreign income for each of the nine fiscal periods during the validity of the option . To benefit from the foreign pensioner tax regime , the individual cannot have been an Italian resident in the five fiscal periods before the regime came into effect .
In the Netherlands , income from dependent work is categorized under " Box 1 " and subject to progressive tax rates ranging from 9.28 % to 49.5 %, with the 49.5 % rate applying to incomes exceeding € 73,031 . Expatriate workers