Portugal is the end of RNH

The end of the RNH in 2024, this was the announcement made by Portuguese Prime Minister Antonio Costa yesterday on CNN Portugal. The Portuguese Prime Minister made a shock announcement, announcing that the non-resident tax regime, which gives foreign pensioners and workers a ceiling on their income tax, would end in 2024.

Portugal is the end of RNH

The head of government announced the end of the special tax on non-habitual residents (RNH), in an interview with CNN Portugal. "It will end in 2024," said Mr. Costa, before adding that this tax regime "no longer makes sense at the moment".

In 2022, according to the latest figures, tax expenditure under the IRS regime for non-habitual residents rose by 18.5 % to 1,507.9 million euros. Two years earlier, this figure stood at 972.2 million euros, and by 2021 it had risen to 1,271.8 million, according to the report on tax expenditure sent to Parliament this year.

This scheme allows workers whose activities are considered to have a high added value to pay a tax on their earnings. special rate of 20 % IRS on income in categories A (salaried employment) and B (self-employment). Pensioners pay an IRS rate of 10 % on their pensions.

Asked about the loss of income, the Prime Minister declared that "the government will not put up any resistance" to raising the minimum wage beyond the 821 euros envisaged, referring to the UGT's negotiating proposal within the framework of social dialogue.

Regarding the employers' proposals, the Prime Minister said there was no question of reopening the debate on the TSU. "Reopening the debate on the TSU is the last thing Portuguese society needs or wants," he said. With regard to the 15th month's tax- and contribution-free payment, Mr. Costa stressed that this measure "is not for everyone" and said that "there is room" to negotiate an increase "for everyone".

The Chief Executive was interviewed by CNN Portugal and answered a series of live questions on the topics on the agenda, from the start of the new school year to housing issues and the new National Health Service model. Several questions were also put by the audience, made up of a group of citizens selected by GfK and representing different social strata and professions, different ages and different regions of the country. This group of citizens was joined by students and professors from Nova SBE.

Link to the Prime Minister's announcement