Portugal to end tax break benefits for thousands of Britons

British citizens who were benefiting from the Non-Habitual Residency (NHR) scheme will no longer be able to do so as policy makers have decided to end it by the end of 2024.

The NHR regime, which enables third-country nationals to obtain residence if they spend more than 183 days in an entire year, was scheduled to expire on January 1, 2024. However, Portugal's government had already fallen because policymakers had failed to do so. Upon reaching agreement on next year's budget, it was decided to phase out the NHR system in December 2024, SchengenVisaInfo.com Report.

The scheme also includes a 20 per cent tax cut on income from high value-added activities, which includes professors, doctors, architects and other professions.

Foreign expatriates moving to Portugal are subject to a flat tax of ten percent on pensions from a foreign source and also receive a tax exemption on income generated outside the country, including rental payments from tenants, if the principal amount is paid on it. Tax is imposed in the country. ,

Portuguese citizens who have lived abroad for more than five years are also eligible to benefit from the scheme.

However, to qualify for the expatriate tax extension, applicants must show proof that they intend to move to Portugal within the year, which can be done by signing an employment or residence contract.

The Socialist Party in Portugal had planned to end the scheme for new applicants by January 1, 2024, calling it a “fiscal injustice” and no longer making sense. The scheme was initially introduced as a recovery package in the wake of the 2008 global financial crisis.

Portugal Pathways reveals that more than 70,000 people have benefited from the migrant tax rebate scheme over the past decade.

Many people had invested heavily of time and money in their planned move but were thrown into uncertainty. This gives them confidence that they can proceed as planned.

The 2024 state budget includes income tax cuts and aims for a budget surplus of 0.2 percent. Depending on developments in the political arena, the plan may be changed after the elections, which are scheduled to be held on March 10.

recently, The Portuguese Parliament agreed to change the tax regime for non-habitual residents, To make workers of companies certified as start-ups eligible for benefits from the NHR scheme.

In addition, researchers in qualifying jobs within the scope of benefits considered product investment of the Investment Tax Code will also be eligible for the NHR scheme.