Portugal is extending the system’s benefits to non-habitual residents for one year, but severely limiting their access, digital newspaper Cinco Dias highlighted on Thursday. Some standards even have retroactive effects, which makes headlines.
Portugal has decided to give more life to the “popular and aggressive” system that “significantly reduces taxes” for non-permanent residents, although it has tightened access standards, Spanish digital newspaper CincoDías reported on Thursday, December 7.
The Non-Habitual Resident (RNH) tax regime was created in 2009 with the aim of encouraging foreign investment in the country. In an interview with TVI and CNN Portugal, Prime Minister António Costa announced that the country would end the programme, but only after his resignation and during the debate on the programme. State budget for 2024PS introduced a change aimed at Implementation of a transitional regime in 2024 for foreigners or pensioners who prove their intention to work or live in Portugal by the end of this year.
In the news that made headlines early in the morning, Sincodias highlighted the extension until December 31, 2024, noting, however, the need to adhere to several criteria, which, from the point of view of the lawyer specializing in international law, responsible for the Portuguese Affairs Department of Egasú, Marilyn Valiente, “It severely limits access” and “will ignore many taxpayers.”
The newspaper explains that taxpayers who become residents for tax purposes by December 31, 2024 and have an employment contract concluded before December 31, 2023, or have a visa or residence permit valid, at least, until the end of 2023. Anyone who has a lease, or other contract granting the use or possession of property in Portuguese territory, signed before October 10, 2023, is also eligible, in addition to A contract promising to purchase ownership rights over real estate. In the case of children enrolled in an educational institution in Portugal, the application for the special regime will be accepted, also on the same date.
That’s what Portugal did, lawyer Marlene Valente told CincoDías Establishment of a transitional personality that protects “the legitimate expectations of citizens who have already initiated material procedures to change their tax residence to Portugal.” Changing countries “naturally has a very big impact on anyone’s life,” he explains.
According to the lawyer, the benefits of the transitional system are so limited that they cannot be “practically” benefited by anyone who did not undergo the operation until last October, and for this reason she excludes the existence of links between the extension of the RNH system and the Spanish government’s decision from the Constitutional Court to approve the tax on large wealth in November.
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