Since January 1, Italy has been trying to attract European retirees with lower taxes. For those moving to the Peninsula. We thought it would be a good idea to compare Portugal and Italy.  

Why choose Portugal over Italy

Tax profit in Italy

On January 1, 2019 a flat tax introduced in the 2019 Italian Finance Act, aimed at retirees. The measure provides a taxation limited to 7% on retirement pensions as well as on foreign-source income. This taxation is only valid for 5 years.

Conditions: settle in one of the eight regions of southern Italy. You can choose a village with fewer than 20,000 inhabitants in Sicily, Calabria, Campania, Puglia, Sardinia, Molise, Basilicata or Abruzzo.

Cost of living in Italy

The cost of living in Italy is more or less the same as in France. Expect higher prices in the larger cities. Note that electricity, gas and telephone rates are higher than in France.

Portuguese tax profit

The status of non-habitual resident (RNH) allows 10% tax on your retirement pensions for a 10-year period. Visit RNH also enables working people to benefit from a lower tax rate. limited to 20 % for 10 years. 

Conditions: Never have been resident in Portugal for tax purposes in the 5 years preceding your move. For working people, be engaged in a high value-added activity. 

Cost of living in Portugal

The cost of living in Portugal is around 20 to 25 % less expensive than in France, in the center and south of the country. north of the country. In the south, prices are more or less the same as in France. Electricity, gas and telephone rates are close to those in France.

Europe is already familiar with tax competition between its member states for multinational headquarters. But the Italian and Portuguese examples show that the purchasing power of pensioners in northern European countries, higher than that of their southern neighbors, could become a new issue in intra-European competition.