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Portugal Business

Portugal is not giving up on tax examptions

Portugal is not giving up on tax examptions

The Portuguese Minister of Foreign Affairs, Augusto Santos Silva, has stated during a recent interview that the tax advantages given to expats and foreigners will not be removed, in spite of the recent complaints by Sweden and, before that, by Finland. The interview was given to the public radio broadcast, Antena 1.

Santos Silva was talking about the Non-Habitual Residents program, which was the primary target of the Swedish and Finnish authorities, and also about the Golden Visa program.

Criticism from Nordic governments

As we recently mentioned, the Nordic countries’ governments have complained to the Portuguese authorities that the ‘Non-Habitual Residents’ was turning into a way for pensioners to avoid taxation at all. The bilateral agreements between Portugal and each of the countries allowed for people coming to the Iberian country to prevent double taxation during their retirements. However, with the exemption given by Portugal, this was turning into a “no taxation” issue.

Criticism from Parliament partners

Moreover, the Portuguese government relies on the support of the two left-wing parties (the Communists and the Left Bloc) to have the majority in the Parliament, and the Left Bloc has been lately criticising the two programs. Real estate speculation is the Bloc’s main argument against Non-Habitual Residents and Golden Visas.

Portugal keeps the same strategy

Amid this context, the strong declarations by the Foreign Affairs minister clearly intend to reassure the markets regarding the current government’s strategy about this matter. Santos Silva added that other countries are deepening this kind of tax advantages (Spain, the Netherlands and Ireland) and Portugal will continue to attract foreign investment this way.

This means, of course, that the Portuguese government is quite alert for the consequences of what is being said around and might influence the real estate market performance, and the economy overall. This will hardly change until the next elections, and it is not expected a left-wing rise, anyway.