PS Socialists have indeed tweaked the controversial ‘NHR’ (non-habitual residency) regime following widespread criticism. But the new ‘costs’ to incoming wealthy pensioners are as minimal as Finance Minister Mário Centeno intimated they would be: just 10% over 10 years.
Reads the proposal for alterations to this year’s State Budget: “The total exemption from taxing pensions revenue obtained overseas by non-habitual residents is eliminated, requiring a 10% rate to be applied, without prejudice to the option of including and eliminating international double taxation.
The new regime will only apply to people who take it up this year, say reports – suggesting there may still be some ‘loopholes’.
ECO online, for example, says residents who enroll as non-habitual residents up until March of 2020 and 2021, will be “protected for fiscal purposes, if they meet the respective conditions (set) in 2019 and 2020 respectively”.
In other words, anyone considering taking up NHR should do so quickly.
The regime, introduced in 2009, has proved a major boon for Portugal, attracting thousands of high net worth foreigners amid widespread criticism that it is patently unfair vis-a-vis wealthy Portuguese pensioners.
Left-wingers Bloco de Esquerda have been among the fiercest critics of the regime. Their response to this ‘bare minimum’ climb-down has yet to be heard.
Meantime a source for financial planners Blevins Franks – which provides cross-border tax, wealth management, pensions and estate planning services to British expats across Europe – says that as far as he can tell there will be no changes to the way dividends and ‘other overseas investment income’ are dealt with in the regime.
“As far as I am aware, no further changes can be made as yesterday was the last day for any amendments and the budget is due to be voted on by parliament on February 6”, said the source.