Tax-Free Pension to encourage 'immigration'

[shanagarry]

I understand that the Portuguese Government is considering or has proposed a system whereas retired people with pensions will be exempt income tax charges on their pensions in an attempt to encourage Northern Europeans or anybody else to move to Portugal - does anybody have any knowledge of this and more importantly the definitions?

If it's as good as it sounds - it would be a wonderful fillip for the Portuguese economy and the property market. Somehow, I think there will be some very long strings attached - but there might not be

[widge]

Foreign pensioners who reside part of the year in Portugal will become exempt from paying income tax on their pensions and thus avoid double taxation, after ruling coalition parties PSD and CDS-PP clarified a law that has existed since 2009 but which the fiscal administration had refused to apply.

The law, which will be enacted in January 2013, had not been applied because the fiscal administration “raised doubts” concerning its clarity, according to Luis Leon, associate partner at Deloitte.

“The delay in enacting the law can only be explained by bad faith on behalf of the fiscal administration”, he said. “The law remains as it was but with the only difference that it has now been clarified.”

Social Democrat MP Paulo Batista Santos, who has been following the process of alterations to the Tax Code closely, said the law aims to attract foreigners to set their second residence in Portugal.

Attracting foreigners is very important for us because they usually have significant purchasing power and contribute to tourism-related activities”, he said. “Rather than penalising them, the new law will encourage those who want to set up their residence here.

Indeed, as reported by daily newspaper Público, the English, Irish, residents of Scandinavian countries and emigrants, continue to be those who most invest in second homes in the Algarve, with traditional tourism markets still closely watching out for opportunities in the areas of Praia da Rocha and Alvor – Portimão’s most touristic areas.

Deloitte’s Luis Leon added that the law was aimed at transforming Portugal into the “Florida of Europe”, where pensioners could spend their retirement years.

The law was clarified by both ruling parties, PSD and CDS-PP, while PS, PCP and BE abstained. But despite the law having finally been clarified and supported by a broad consensus, the fiscal administration has yet to settle an unknown number of cases of people demanding non-habitual resident status, which remain unresolved since 2009.

“We do not know the exact number of unresolved cases. That has to do with the tax administration”, says Batista Santos. “But our desire is that this law will help resolve these cases.”

[shanagarry]

Foreign pensioners who reside part of the year in Portugal will become exempt from paying income tax on their pensions

What is the definition of part of the year and how would it apply to pensioners permanently residing here

[pato]

Whats the "Double taxation" thing?

[widge]

Very complicated so get expert advice but this might help..................on the other hand !!!!!!!

http://www.telegraph.co.uk/finance/pers ... tugal.html

[EMM]

Existing expats who have already taken up residency will not qualify.
As ever the devil will be in the detail.

[shanagarry]

Somehow I didn't think it would be straightforward

[R.Wethereyet]

Very simple, you don't pay tax on your pension, but then you have to accept to pay double tax on the car you buy, pay IVA at 23% on everything you buy, accept the worst customer service in Europe, and then accept that as your still a foreigner here, you have no option than to to put up with it.

Faro airport will be overrun with pensioners.

[shanagarry]

Very simple, you don't pay tax on your pension, but then you have to accept to pay double tax on the car you buy, pay IVA at 23% on everything you buy, accept the worst customer service in Europe, and then accept that as your still a foreigner here, you have no option than to to put up with it.

Faro airport will be overrun with pensioners.

What a miserable shite - I bet England can't wait to have you back to put everything right

[EMM]

" Hear Hear ". The letter pages of the English press in Portugal are full of such comments, it will only get worse when they lose their corrie and eastenders.

[bruce]

" Hear Hear ". The letter pages of the English press in Portugal are full of such comments, it will only get worse when they lose their corrie and eastenders.

Each to their own EMM if people like these programmes then that is up to them.
Personally I don't bother with tv when I am on holiday, however, if I lived there it might be a different scenario.

[shanagarry]

it will only get worse when they lose their corrie and eastenders.

While this is not the subject of this topic - I couldn't let it pass without commenting on the reason many people chose to leave their homeland. Is it not to embrace the culture of a new country and not inflict the depravity depicted by the 'soaps' and other so-called reality TV from their homeland on the indigenous population of their new homeland or did I get that wrong?

I suspect Portugal may have their own 'soaps' etc and they too may depict depravity - I don't know as I chose to avoid watching that sort of TV. I see no justification for the BBC or others to make provision for non-licence fee paying expats to have UK or other's TV facilities outside their own country. The argument that a licence is paid in their homeland does not in my opinion entitle anybody to shift their viewing location to another country as the licence is for that country only. if in doubt and as an example - read the small print on the UK licence, its very precise. There will be the argument, I suspect, that the Sky subscription on top of the UK TV Licence provides that 'bridge' for everybody to enjoy their TV regardless of location - clearly Sky has seen the light and pulled the 'plug'. If expats do not pay a UK TV Licence they have no right to UK TV facilities - in my opinion.

I had a telephone conversation with Sky several years ago on this matter and their party-line is that they do not provide a service outside the UK and Ireland. When I suggested they should walk past any bar showing live Football in the Algarve or Spain - they told me it was not possible. Clearly somebody from Livingstone eventually found their way to an airport, got on a plane and realised the reality - the rest is history.

I wonder how long it will be before radio streaming through the internet will be subjected to a similar type of restriction. In times of financial difficulty - every revenue generative activity will come under scrutiny and if it can create an income stream without too great a cost - the listening needs and wishes of expats will be the last thing on their minds.

Happy New Year

[laserblazer]

You've gone way off-topic so I've put a reply in the proper place posting.php?mode=reply&f=2&t=24013

[James Faro]

" Hear Hear ". The letter pages of the English press in Portugal are full of such comments, it will only get worse when they lose their corrie and eastenders.

Ha ha!

As regards to tax incentives what a government can offer a future goverment can take away. That French actor Gerald Depardieu is moving to Russia as they have a 13% income tax rate. He'd move somewhere else if in the future they hike the rate up!

[shanagarry]

James

I think it a matter of 'scale' as far as someone like Depardieu is concerned - to the rest of us mere mortals - it matters not.

In the case of the Portuguese Government - it's refreshing to see that they are prepared to try 'something' - unlike the Spanish, Italians etc who appear to be sitting on their hands. However, the execution of any proposal is likely to be the tipping point.

Let's see what they do before we dismis it