Expats In Portugal Will Now Have a Simpler Application Process For Tax Breaks
London, UK (Pryce Warner International) August 14th, 2012 - Portugal has eased its tax regulations for high earning Expats as a means of encouraging them to store more assets in the debt burdened country.
In 2009 the Portuguese government introduced a new tax rate for non-resident Expats of 20% on income earned within Portugal. Under these regulations foreign income was also exempt from Portuguese taxation, though Expats could still be liable for tax in their home country.
In order to qualify for these tax breaks, Expats were required to be "high net worth individuals" and to have been living permanently in Portgual for less than five years. This meant they had to provide evidnce to the Portuguese tax officials provided by the tax authority in the country of their residence, that they had been resident abroad and that foreign earned income was being taxed in the country of residence.
Portugal's tax authorities have now decided that this is no longer required to prove your previous residency in a foreign country, making it easier for Expats who relocate frequently to apply for tax breaks in Portgual.
Expats are now only required to sign a declaration stating that they were previously resident in another country. This would then entitle them to a 20% tax rate, regardless of the Expats income, that would apply for ten years.
It is strongly suspected that this move has been done to help ease the government debt and shrinking economy by encouraging wealthy Expats to relocate their finances to Portugal. Due to Portgual remaining one of the Eurozone countries with the most economic instability, it is highly advisable that anyone considering moving to Porugal consult a financial advisor before doing so. Anyone considering a move has also been advised to strongly consider multi currency investment accounts, as these provide a high level of diversification and therefore stronger protection against currency fluctuations.
By Aneil Fatania
Pryce Warner International Group
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