Tax Exemptions in Portugal

In this article from the Telegraph newspaper, David Franks the founder of Blevins Franks discusses the rules regarding tax exemptions in Portugal.

Whilst most EU countries are increasing their tax rates and removing tax exemptions, some are also offering deals to attract foreigners to come and reside, and even bring their business or set one up.

Portugal offers the new tax resident an income tax free holiday for 10 years, including receiving your pension tax free. They have a reasonable range of double tax treaties to protect the income from being taxed in the country of origin. Capital gains however remain taxable in most circumstances in Portugal, except that gains on the sale of UK property by a Portuguese resident is tax free. Legitimate offshore structures are available to shelter gains and income regardless of the new 10 year exemption.

The 10 year tax holiday was introduced back dated to 1st January 2009, but the Portuguese tax authorities have been dragging their feet on granting any exemptions, placing several (probably illegal) hurdles in the way. Nonetheless, with careful planning, this exemption will have to be granted and if combined with some other tax structures, makes Portugal an attractive haven.

To learn more about your eligibility for tax exemptions in Portugal we recommend that you consult a reputable financial adviser.

If you are considering purchasing a property and moving to Portugal you may be interested in our advice on how to find the right property in Portugal and buying property in Portugal including purchase costs.