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IMI
Amnesty
Having read of the possibility of an Amnesty for us beleagured Offshore property owners I was very surprised during a conversation with Finesco to hear it is mere speculation.
Is it speculation or is there a real possibility and if so how will it change things. I have read Biffas's wonderful explanations but as this latest revelation has only just emerged - is there a genuine opportunity?
I was just about to head to Delaware or Malta but am encouraged that a 'vehicle' to address the needs of the populus without too much financial pain is a few weeks away
Is it speculation or is there a real possibility and if so how will it change things. I have read Biffas's wonderful explanations but as this latest revelation has only just emerged - is there a genuine opportunity?
I was just about to head to Delaware or Malta but am encouraged that a 'vehicle' to address the needs of the populus without too much financial pain is a few weeks away
Amnesty? What amnesty?!
Speculation only at this stage.
It is amazing how one article in one newspaper can cause so much confusion. News of an amnesty has not appeared in any of the knowledgeable Portuguese newspapers and whilst it cannot be discounted (nothing can!) there is nothing concrete that we are aware of.
It is amazing how one article in one newspaper can cause so much confusion. News of an amnesty has not appeared in any of the knowledgeable Portuguese newspapers and whilst it cannot be discounted (nothing can!) there is nothing concrete that we are aware of.
Article in Irish Newspaper of interest re Portuguese Budget
Yesterday, the Sunday Business Post in Ireland had a one page article entitled "Tax-free paradises in Portugal at risk". It reported that last week's Budget in Porgual failed to deliver an anticipated compromise on the property tax regime.
The link to the full article can be found at:
http://www.sbpost.ie/web/Home/Document% ... atures.asp
(www.sbpost.ie under News Features - 19 October 2003)
The actual newspaper also included a table "Advice on how to avoid heavy tax penalties", but with the limited time available I could not find it on the website - perhaps others will be able to find this if interested.
This article may be of interest to members of CVO.com
Regards
Paul J, Dublin
The link to the full article can be found at:
http://www.sbpost.ie/web/Home/Document% ... atures.asp
(www.sbpost.ie under News Features - 19 October 2003)
The actual newspaper also included a table "Advice on how to avoid heavy tax penalties", but with the limited time available I could not find it on the website - perhaps others will be able to find this if interested.
This article may be of interest to members of CVO.com
Regards
Paul J, Dublin
Budget
I don't think we really expected much in the Budget. that is used for dealing with other things so we were not surprised that it never mentioned the tax proposals.
The new law should be publsihed shortly and then we will know where we stand
The new law should be publsihed shortly and then we will know where we stand
Tax changes
We have now seen a copy of the actual law that is simply waiting for the signature of the President of the Republic before publication in the Government Gazette and being implemented. The law gives no amnesties or other get out clauses and indeed is to take effect from 1st December 2003 which means that the new rates will come into effect in respect of current year payable in 2004.
Thus if a property is still held offshore as at 31.12.2003 then the company will pay the increased 5% rate on the INCREASED rate valuations in 2004 in respect of the year 2003. That is what we can definitely say at the present time and there appears to be no time left for Parliament to rediscuss and vote on any amendments.
The only glimmer of hope is that there is rumoured to be a clause inserted in the 2004 Budget which will be published on or around 29th December whereby the 5% tax will be "adjourned" until 31.12.2004. At present this is only well founded rumour.
Thus if a property is still held offshore as at 31.12.2003 then the company will pay the increased 5% rate on the INCREASED rate valuations in 2004 in respect of the year 2003. That is what we can definitely say at the present time and there appears to be no time left for Parliament to rediscuss and vote on any amendments.
The only glimmer of hope is that there is rumoured to be a clause inserted in the 2004 Budget which will be published on or around 29th December whereby the 5% tax will be "adjourned" until 31.12.2004. At present this is only well founded rumour.
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Guest
and for those who have done the transfer might like to know i have just received a registered letter from silves camara questioning the value of the "rustic land"...i have 60 days to reply otherwise its a court case and then who knows what!!!!.
well after the guildford four and birmingham six looks like ill be the silves one.......fighting fund contributions welcome
well after the guildford four and birmingham six looks like ill be the silves one.......fighting fund contributions welcome
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Guest
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Guest
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Guest
The saga goes on i have engaged guadalupe almeida in lagoa (the solicitor i used during the original purchase) to migrate my villa from offshore status into my own name all the notary has been booked for dec 4th all fine so i think, then this afternoon i receive an e mail from her office asking me whether the irc(2002) has been taken care of on further enquiry i find that this is a tax was introduced last year on offshore companies and will have to be paid to date on completion together with any balance for 2003 less all offsettable villa expenses this is all news to me has anybody heard of this before.
On a final note it appears that according to one of biffas earlier posts the new law kicks in on dec 1st so it appears that my visit to the notary will have to be brought forward.
On a final note it appears that according to one of biffas earlier posts the new law kicks in on dec 1st so it appears that my visit to the notary will have to be brought forward.
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Guest
IMI oh My
Oh Dear!
Strong rumours this afternoon of an amendment to the proposed law whereby the 5% IMI will only be applicable to NEW acquistions of property by listed companies. Sort of makes sense if all they want to do is stop offshore (listed) ownership.
Maybe more news tomorrow as we do have a small "in" now with someone in the Parliament.
My advice though is to keep your alterations (redomicile or sell) on track. Don't forget that the 2% tax which came in force in 2002 is still there and 2% of the new revised values can hurt most people.
Yours with sleepless nights
Strong rumours this afternoon of an amendment to the proposed law whereby the 5% IMI will only be applicable to NEW acquistions of property by listed companies. Sort of makes sense if all they want to do is stop offshore (listed) ownership.
Maybe more news tomorrow as we do have a small "in" now with someone in the Parliament.
My advice though is to keep your alterations (redomicile or sell) on track. Don't forget that the 2% tax which came in force in 2002 is still there and 2% of the new revised values can hurt most people.
Yours with sleepless nights
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Guest
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offshore
I strongly suspect that all along the Governemnt have employed a firm of Wall St Management Consultants to manage this process! So................. 6 weeks before the law comes into effect and just when most are either transferring onshore or fleeing to Malta , Delaware et al, and certainly to late to reverse the process,they change the rules.
Net result = 1) death of new offshore company formation courtesy of 15% SISA and lost of transfer and re domicile activity - which was their overiding objective at the outset, and could have quite easily have been achieved simply by doing no more than raising SISA. 2) increased CGT revenue due to all those transferring onshore, who will I suspect be allowed to do so unopposed at a reasonable value, thus creating large future tax flows when owners finally sell. 3) fees and commssions for the advagados. 4) net loss for the property owners who have had to stump up fees to transfer or sell.
G
Net result = 1) death of new offshore company formation courtesy of 15% SISA and lost of transfer and re domicile activity - which was their overiding objective at the outset, and could have quite easily have been achieved simply by doing no more than raising SISA. 2) increased CGT revenue due to all those transferring onshore, who will I suspect be allowed to do so unopposed at a reasonable value, thus creating large future tax flows when owners finally sell. 3) fees and commssions for the advagados. 4) net loss for the property owners who have had to stump up fees to transfer or sell.
G
Well done Gambrinus. To the "point" as usual!
This is a letter as published by the Almancil Business Association (AEA):
"After analysing the Property Taxation Reform, which will come into force 1st January 2004, and considering the inevitable reaction of more that 50% of owners that are concerned (in the tourist area of Almancil), Almancil Business Association Board has concluded that the taxation of a 5% rate (IMI: Property Council Tax) on properties held by off-shores entities will be extremely costly for the economy of Almancil, for Loulé Municipality and even for the Algarve.
In order to be aware of the predictable consequences of the Reform, AEA has requested the opinion of the international consultancy firm: KPMG, which has confirmed the concerns of AEA Board; thus, AEA has made contacts with several entities, namely, with the parliamentary group of PSD in the Assembly of the Republic and with the Ministry of Finance, as to make them aware of the serious problem that has already had repercussions on the local and international press.
AEA considers that the Property Taxation Reform is useful for the country, but it cannot be implemented betraying the trust of thousands of foreign investors that had follow, during the last decades, a legal system consented by the Portuguese Government. For that reason, AEA has suggested to the Government that the new taxation system (5% of IMI) should only be applied to properties - acquired by off-shore entities - from the date of the coming into force of the Reform onwards (01/01/2004), the present owners being able to follow the tax system presently in force.
Besides, AEA has also requested a time limit of one year to allow Beneficial Owners of off-shore companies to acquire “their” property, without being subject to Corporate Tax (capital gains).
AEA Board is confident that the Government will give its utmost attention to this matter and waits for a positive answer. 09/10/2003."
Information we have gathered today from Government sources although not directly involved in this matter support the above. In other words the 5% will only apply to new acquisitions (of which there will be none). Existing onwers will be faced with accepting the 2% rate or moving to avoid it. With proposed revaluations in hand most will find 2% unacceptable especially together with corporate tax at 25% on net presumed income. The above, if true, may at least give some breathing space.
Yours (holding his breath!)
This is a letter as published by the Almancil Business Association (AEA):
"After analysing the Property Taxation Reform, which will come into force 1st January 2004, and considering the inevitable reaction of more that 50% of owners that are concerned (in the tourist area of Almancil), Almancil Business Association Board has concluded that the taxation of a 5% rate (IMI: Property Council Tax) on properties held by off-shores entities will be extremely costly for the economy of Almancil, for Loulé Municipality and even for the Algarve.
In order to be aware of the predictable consequences of the Reform, AEA has requested the opinion of the international consultancy firm: KPMG, which has confirmed the concerns of AEA Board; thus, AEA has made contacts with several entities, namely, with the parliamentary group of PSD in the Assembly of the Republic and with the Ministry of Finance, as to make them aware of the serious problem that has already had repercussions on the local and international press.
AEA considers that the Property Taxation Reform is useful for the country, but it cannot be implemented betraying the trust of thousands of foreign investors that had follow, during the last decades, a legal system consented by the Portuguese Government. For that reason, AEA has suggested to the Government that the new taxation system (5% of IMI) should only be applied to properties - acquired by off-shore entities - from the date of the coming into force of the Reform onwards (01/01/2004), the present owners being able to follow the tax system presently in force.
Besides, AEA has also requested a time limit of one year to allow Beneficial Owners of off-shore companies to acquire “their” property, without being subject to Corporate Tax (capital gains).
AEA Board is confident that the Government will give its utmost attention to this matter and waits for a positive answer. 09/10/2003."
Information we have gathered today from Government sources although not directly involved in this matter support the above. In other words the 5% will only apply to new acquisitions (of which there will be none). Existing onwers will be faced with accepting the 2% rate or moving to avoid it. With proposed revaluations in hand most will find 2% unacceptable especially together with corporate tax at 25% on net presumed income. The above, if true, may at least give some breathing space.
Yours (holding his breath!)