Tax advantages of Portugal to nonresidents

Tax advantages of Portugal to nonresidents

Portugal is among the most attractive countries both for foreign entrepreneurs, and for individuals.

It is promoted by the taxation system of the country - one of the most flexible in Europe. Pluses of tax benefits concern also nonresidents, and those who are going to remain for a long time here.

For example, purchase of housing in Portugal gives to the owner of the real estate tax and visa benefits. Namely – obtaining the Schengen multivisa with a possibility of stay in the country to 180 days in a year! At the same time, house cost in Portugal or several real estate objects shall be not less than 500,000 euros (Golden Visa).

Privileges for nonresidents.

As well as everywhere, in Portugal tax nonresidents are those who will see off in the country menee183 days in a year. The amount of a tax on income from professional activity and hired labor in the territory of Portugal for them is 25 percent. And also, 28 percent from income from capital gain, lease, dividends and other forms of the investment revenue gained in the country.

But nonresidents can count on serious eases in payment of taxes if they at the same time are tax residents in one of so-called Tax haven of the countries. Here also Russia enters. As a result the tax on income at the preferential rate will make 15 percent, a royalty – 10 percent, capital gain – 10 percent. Besides, they can be exempted from a tax on income from professional activity and hired labor in the territory of Portugal.

Bonuses for pensioners.

In 2013 the government of Portugal made the important decision in a question of social security of people of a retirement age, namely those who did not earn pension entitlement in the country. So, foreigners and citizens of the Portugal who long time earned an insurance experience outside this country are exempted from payment of a tax on income. Such decision made for pensioners moving on a permanent residence to Portugal from abroad in addition attractive. It is no wonder that Portugal traditionally enters in Top-5 of the best countries of Europe for accommodation of pensioners: the cost of living in the country is cheaper, than in the Russian capital. Quality of health care and tender climate – one more pluses for benefit of purchase here housing. Magnificent apartments in the former capital – Porto – will cost on average 600,000 euros. It is just enough for obtaining the residence permit through an investment program.

What types of tax are in Portugal?

The main list of taxes of the country, anyway, is similar to the Russian system of taxation. But there are also unique types:

· IRC is income tax of the enterprises (corporate);

· IRS is the Portuguese analog of the PIT;

· IVA IS THE VAT;

· IMI is an annual property tax;

· IMT is a single property tax which is paid at assignment of rights of property;

· ISV is a tax at primary registration of motor transport;

· IUC is an annual transport tax;

· Stamp duty.

Real estate duty.

So, you decided to purchase large apartments in the center of Lisbon for 750,000 euros. What taxes in this case should you pay? All three! Upon purchase of real estate in the country the so-called stamp tax – 0.8 percent is paid. The property right transfer tax is once paid. Its size - 6.0 - 6.5 percent. The real estate duty is annually paid: from 0.3 to 0.8 percent, everything depends on object type.

In case of sale of a real estate object tax nonresidents pay capital gains tax, it is determined as a difference between the purchase price and the selling price by a rate of 28 percent. At donation or inheritance taxes do not assess spouses, children, parents and grandsons. For others the amount of a donation duty and inheritance is 10 percent.

Tax residents: privileges and bonuses.

Let's specify that those persons who spend in the territory of Portugal more than 183 days in a year are considered as tax residents. They are assessed with a tax on income from 14.5 percent up to 48 percent. In the country the progressive scale of income tax is accepted. In other words, than the bigger royalties are received by natural person (a hired employee or the entrepreneur), those should pay a bigger tax levy. The minimum interest is deducted from income which do not exceed 70,000 euros. Shall pay those who received 80,000 euros and more in a year 48 percent.

It is important to tell also about the payment mechanism of income tax. Once a month residents and nonresidents make advance payments: residents - from 14.5 percent, nonresidents – 21.5 percent. Advance payments are kept from income by tax agents. At the end of the financial year the tax declaration moves. Its data allow tax specialists to define the amount of surcharge or return of excessively listed tax payments from the budget.

Standard income tax rate is levied of 25 percent. The VAT rate is 23 percent.

The special tax status for residents.

It is worth mentioning also the special Non-HabitualResidents program which is designed to attract highly qualified specialists, talented persons and wealthy individuals to Portugal (architects, engineers, artists, actors, doctors, IT specialists, investors, etc.). So, tax residents who never lived before in this country can count on the special tax status within this program. The status is given for 10 years. It automatically reduces a tax rate for income to 20 percent. For owners of the status of "non habitual resident" remission of the taxes on income received outside Portugal including from a work for hire, pensions, percent, dividends, a royalty is also provided.

In total it does even more attractive purchase of the real estate in Portugal. So, it is possible to purchase magnificent apartments in the north of the country, in Porto, for 606,000 euros. The real estate, of 183 sq.m, located in the picturesque region, includes 3 bedrooms, 3 bathrooms, the spacious living room, the equipped kitchen and gym. This place has every chance to become the best house for you.

Tax burden for private business.

In the fiscal sphere for legal entities there is quite flexible system of taxation. So, in Portugal creation of the company with completely foreign list of founders, participation of foreigners in the capital of already existing enterprises or registration of the immigrant as the subject of an entrepreneurship is provided. Also in the country there are analogs of the joint-stock company, Ltd company and such form of business as an entrepreneurship.

Let's deal with tax rates for legal entities. EscortNavi Income tax rate averages 21 percent for residents and nonresidents. But also this figure can be lowered seriously in case the organization was created and registered in free trade zones – for example, the Azores or the island of Madeira.

Let's note that that income which is gained in Portugal is assessed with a tax. Receipts are not assessed with taxes from abroad if with these countries there is an agreement on prevention of double taxation.

Deposit interests are equated to dividends therefore also rates on them same. Interest rates only in case it is about profit earning in the form of a royalty differ. This income for residents is assessed with a tax of 16.5 percent. Nonresidents (legal persons) will pay about 15 percent, nonresidents (natural persons) - 21.5 percent.

"Tax on the consumer".

The value added tax is well familiar to us. In Portugal - it is IVA (NDS). Only here it is called a tax on the consumer, in fact any VAT is paid by the buyer.

The rate of "a tax on the consumer" in Portugal is 23 percent. But in the country privileges which are capable to lower a VAT rate to 13 or 6 percent are provided! It is possible if you are engaged, for example, in food sales of products, provide medical services and are engaged in transportation of passengers. Eases are provided and for flowed who conducts activity in the FTA (Azora and Madeira).

Portugal is the country of opportunities. It, really, attracts the inostrayets seeking to purchase the real estate in Portugal and to receive the residence permit including. Specialists of the AWAY REALTY company will prompt as it is correct to dispose of means, will point to growth points in the housing market and also will help to deal with registration of the corresponding document packages. Welcome!