&NewLine;<h2 class="wp-block-heading">Reform of non-habitual resident status&not a bad thing </h2>&NewLine;&NewLine;&NewLine;&NewLine;<p>We've been telling you about it since December, and now, at the end of January 2020, things have come to fruition. <strong><a href="https://vivreauportugalconsulting.com/reforme-du-rnh-2020/" class="rank-math-link"><span style="text-decoration: underline;">budget bill&nbsp&semi;2020</span></a></strong>which will definitively reform the non-habitual resident status of foreign pensioners&comma; of course if it is passed&period; </p>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">The origin of non-habitual resident status </h3>&NewLine;&NewLine;&NewLine;&NewLine;&NewLine;&NewLine;<div style="height:20px" aria-hidden="true" class="wp-block-spacer"></div>&NewLine;&NewLine;&NewLine;&NewLine;<p>The "non-habitual residents&ThinSpace;" tax regime is provided for in the IRS&period Code; It was introduced by Decree-Law no. 249&sol;2009&comma; of September 23&nbsp&semi;comma; and supplemented by Ordinance no. 12&sol;2010 of January 7&nbsp&semi;comma; with the aim of attracting qualified professionals&comma; foreign investors and retirees to Portugal&period; </p>&NewLine;&NewLine;&NewLine;&NewLine;<p>It's been 10 years since the RNH was introduced&comma; the time has now come to reform the scheme&period; This scheme was created with the intention of attracting to Portugal&comma; people engaged in high value-added activities&comma; foreign investors and retirees&period; </p>&NewLine;&NewLine;&NewLine;&NewLine;<p>By introducing this highly attractive tax regime for 10 years&comma; Portugal intended to compete with some of the favorable regimes offered by other countries &lpar;for example&comma; Italy and the UK&rpar;&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p>In addition&comma; most income earned abroad by "&ThinSpace;non-habitual residents&ThinSpace;" can benefit from an exemption&comma; in Portugal&comma; provided certain rules are respected&period; Thus&comma; income from work obtained by a "&ThinSpace;non-habitual residents&ThinSpace;" abroad can benefit from a total or partial exemption&comma; under certain conditions&nbsp&semi;&colon;</p>&NewLine;&NewLine;&NewLine;&NewLine;<ol class="wp-block-list"><li>are taxed in the respective countries of the state of origin&comma; in compliance with the tax treaty signed by Portugal and the state in question&semi; </li><li>are taxed in the other country&comma; territory or region&comma; in cases where there is no convention for the elimination of double taxation&comma; provided that the gains are not considered to have been obtained on Portuguese territory&period; As for income earned&comma; in the abroad&comma; in activities involving the provision of services of high added value&comma; of a scientific&comma; artistic or technical nature&comma; contained in ordinance no. 12&sol;2010 of January 7&comma; or intellectual or industrial property&comma; or even the provision of information relating to experience gained in the industrial&comma; commercial or scientific&comma; sector, such as capital income&comma; property income and active increases in &lpar;capital gains&rpar;&comma; may be exempt from the IRS in Portugal&period;<br></li></ol>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">Reform of non-habitual resident status for working people in December 2019 </h3>&NewLine;&NewLine;&NewLine;&NewLine;<p><strong><a href="https://vivreauportugalconsulting.com/rnh-liste-des-activites/" class="rank-math-link"><span style="text-decoration: underline;">At the end of the year&nbsp&semi;2019</span></a></strong>The government has reformed the list of activities with high added value&comma; the old list included several branches of activity&comma; such as architects&comma; engineers&comma; artists&comma; actors and musicians&comma; auditors and tax advisors&comma; doctors and dentists&comma; university professors&comma; investors&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p>The new list&comma; applicable from <strong>1&sol;1&sol;2020</strong>&comma; eliminated several of these activities and introduced a new list of activities&comma; now based on the Portuguese professional classification &lpar;CPP&rpar;&period; Note&comma; in any case&comma; that the above list remains applicable to "&ThinSpace;Non-usual residents&ThinSpace;" previously registered as such&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">Why this reform of the non-habitual resident status for foreign pensioners is a good thing</h3>&NewLine;&NewLine;&NewLine;&NewLine;<p>Many will say that foreign retirees have boosted the country's economy&comma; by buying houses&comma; by consuming&comma; etc&period; In itself this is not totally untrue&comma; but the reality is quite different&period; For the vast majority of them&comma; foreign retirees have not invested en masse in <strong><span style="text-decoration: underline;"><a aria-label="l’immobilier portugais (opens in a new tab)" rel="noreferrer noopener" class="rank-math-link rank-math-link" href="https://agencelusofrancaiseimmobilier.com/" target="_blank">Portuguese real estate</a></span> </strong>On the other hand, they were content to rent their accommodation&period; </p>&NewLine;&NewLine;&NewLine;&NewLine;&NewLine;&NewLine;<p>On the other hand&comma; 100&nbsp&semi;&percnt; foreign pensioners and whatever their nationality&comma; benefit from and use 100&nbsp&semi;&percnt; Portugal's infrastructures &lpar;public hospitals&comma; road network ...&rpar; and in return they don't participate in the collective effort&period; </p>&NewLine;&NewLine;&NewLine;&NewLine;<p>The tax rate chosen by the government is very low; by way of comparison, the 1st tax bracket is <strong>14&comma;5&nbsp&semi;&percnt;</strong>As you can see, the government is once again giving a gift to foreign pensioners&period; </p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Another positive point is that this reform of the RNH will enable you to avoid any risk of requalification of your expatriation for tax purposes by your former country of residence&period; </p>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">It is still possible to take advantage of the total tax exemption</h3>&NewLine;&NewLine;&NewLine;&NewLine;<p>Normally&comma; the&nbsp&semi;2020 budget should be voted on February 7&nbsp&semi;2020&comma; if the government obtains the majority of votes and Europe does not reject the budget&period; By the time this reform is put in place&comma; we believe that foreign pensioners who will proceed to the <strong><a class="rank-math-link rank-math-link" href="https://vivreauportugalconsulting.com/expatriation-au-portugal/demande-de-rnh/"><span style="text-decoration: underline;">request for RNH</span></a></strong> in 2020 will be eligible for tax exemption&period; </p>&NewLine;
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