{"id":27902,"date":"2023-10-19T03:30:02","date_gmt":"2023-10-19T03:30:02","guid":{"rendered":"https:\/\/isafespend.com\/personal-finance\/retirement\/move-to-europe-and-pay-low-or-zero-tax-in-these-4-countries\/"},"modified":"2023-10-19T03:30:02","modified_gmt":"2023-10-19T03:30:02","slug":"move-to-europe-and-pay-low-or-zero-tax-in-these-4-countries","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=27902","title":{"rendered":"Move To Europe And Pay Low (Or Zero) Tax In These 4 Countries"},"content":{"rendered":"
\n

Europe has a reputation for high taxes\u2026 but this isn\u2019t always fair. In fact, there are many low-tax and even-no tax schemes in place in various countries, which investors, businesses, retirees, and even remote workers can take advantage of.<\/p>\n

These schemes are always subject to change or even cancelation\u2026 so I always advise people to move quickly if they want \u201cin\u201d on a particular program.<\/p>\n

Portugal is a case in point.<\/p>\n

Hot on the heels of major changes to its Golden Visa program\u2014which mean that property is no longer a qualifying investment to gain residency\u2014Portugal is considering another major change that will affect expats. Specifically, how expats are taxed.<\/p>\n

Portugal\u2019s Golden Visa changes have been reported by some as a ban or total cancellation of the Golden Visa regime. In fact, in the end, the final bill approved by parliament keeps the Portuguese Golden Visa in place, but takes away what was by far the most popular form of investment to get the visa\u2026 purchasing a property. Options to invest in Portuguese business, culture, or a fund remain.<\/p>\n

<\/fbs-ad><\/p>\n

But Portugal\u2019s latest proposed change could hurt the country\u2019s attractiveness for expats even more\u2026<\/p>\n

Portugal\u2019s prime minister, Ant\u00f3nio Costa, told CNN that it \u201cno longer makes sense to continue\u201d a special tax incentive program that benefits expats, and said his government would seek to end the regime after 2024.<\/p>\n

Portugal\u2019s \u201cNHR\u201d Program<\/strong><\/h2>\n

Portugal\u2019s Non-Habitual Resident (NHR) tax program offers a flat tax of 20% on employment income for 10 years, for those who move to the country, among other benefits. There\u2019s zero tax on most forms of income from outside Portugal.<\/p>\n

The NHR, like the Golden Visa, is being blamed for contributing to Portugal\u2019s housing crisis, with prices pushed up for locals because of an influx of wealthy foreigners. And so the government wants to abolish it.<\/p>\n

I spoke with Portuguese attorney Jo\u00e3o G. Gil Figueira, who deals with a lot of expat issues, and this was his take\u2026<\/p>\n

\u201cIn truth, I am still thinking about it. There are obvious implications in terms of attracting new residents to Portugal if the program ends. We have now seen the first proposal of the State Budget and the new regime that should replace the NHR is extremely limited in scope, to a point it\u2019s not comparable at all. The State Budget will grandfather-in existing beneficiaries and applicants, so in the last week we have seen an influx of people trying to secure the status.\u201d<\/p>\n

\u201cEven some left-wingers say terminating the NHR is not going to tackle the housing situation. It\u2019s too late now. Credible experts converge on the opinion that the housing crisis is a supply and demand problem created by the lack of new construction. Even M\u00e1rio Centeno, our left-wing ex-Minister of Finance, thinks that this plan does not make any sense. This is pure politics.\u201d<\/p>\n

Since the prime minister\u2019s remarks, his government has submitted its budget proposals for 2024 and it includes plans to end the NHR. The final vote on the budget is at the end of November.<\/p>\n

But, as we know, there was months of back and forth on the Golden Visa issue before Portugal decided to keep the Golden Visa but with major changes\u2026 Gil Figueira says it\u2019s not out of the question that the same thing happens with the NHR: \u201cWe could see a messy back and forth, a fruitless t\u00eate-\u00e0-t\u00eate similar to the charade we had going on for almost a year regarding the Golden Visa. The regime could have been fine-tuned, for instance introducing low flat tax rates for otherwise exempt income, preserving some of its alure. No study was conducted to assess the real impact of terminating the NHR regime and I fear there will be a considerable fiscal and brain loss for the country.\u201d<\/p>\n

If the measure passes, there\u2019s likely to continue to be a big rush to acquire the NHR status before the opportunity runs out\u2026<\/p>\n

Assuming Portugal does end the NHR regime, the country is likely to put in place some other tax incentives to attract foreigners, which may or may not be as attractive, as Gil Figueira indicates.<\/p>\n

Indeed, the budget proposal includes details on a new regime that would give new Portuguese tax residents a 50% reduction in personal income taxes for five years (capped at \u20ac250,000 per year).<\/p>\n

According to the budget proposals, anyone who meets the criteria for the NHR on or before Dec. 31, 2023 and registers before Mar. 31, 2024, can continue to avail of the scheme.<\/p>\n

So, in short, move very quickly if you want to live in Portugal and enjoy benefits like zero tax on foreign-source income\u2026<\/p>\n

However, Portugal is not the only country in Europe to offer generous tax incentives for expats who relocate there.<\/p>\n

You do have other options\u2026<\/p>\n

Italy\u2019s 7% Tax For Expats<\/strong><\/h2>\n

Italy introduced a highly enticing tax incentive for foreigners in 2020\u2026<\/p>\n

If you\u2019ve lived outside of Italy for the previous five years, and hail from a country with a tax treaty with Italy (such as the United States and Canada), you can move to Italy and pay a 7% flat tax on foreign-source income.<\/p>\n

So, if you receive a foreign pension, you can avail of this rate\u2014but you have to move to a town with a population of less than 20,000 in the south of Italy, in a region such as Abruzzo, Basilicata, Calabria, Campania, or Puglia, or the islands of Sicily or Sardinia.<\/p>\n

These are some of the most laidback, beautiful, and culture-rich parts of the country\u2026 so relocating there is hardly a chore\u2026<\/p>\n

You can avail of the 7% tax rate for up to 10 years. When your time is up, your income will be taxed at standard Italian rates, between 23% and 43%.<\/p>\n

Italy has another scheme for businesses which means you can establish a business presence in Italy while owing no tax there\u2026<\/p>\n

Called the \u201cRepresentative Office Visa,\u201d this scheme allows you to open a business office in Italy and pay no tax on that operation\u2014and you don\u2019t have to invest any money in Italy either. Just open an office.<\/p>\n

With this visa, you can stay in Italy, and you can even bring your family\u2026 but you don\u2019t have to stay. There are no \u201cminimum presence requirements\u201d in order to keep the visa.<\/p>\n

However, the criteria are very specific. You are not doing business in Italy, but rather promoting your business within Italy\u2026 make sure you have a good local lawyer on your side to structure the operation properly.<\/p>\n

Two Options In Greece<\/strong><\/h2>\n

Like Italy, Greece boasts an enviable lifestyle\u2026 sumptuous food and stunning beaches\u2026 and one of the lowest costs of living in Europe\u2026<\/p>\n

And, like Italy, Greece introduced a 7% flat tax for certain eligible expats.<\/p>\n

The scheme is aimed at retirees, but the 7% flat rate applies to whatever income a person might have, be that rents or dividends as well as pensions. Again like Italy\u2019s program, however, it only applies to those from countries with which Greece has a double taxation treaty (that includes the United States and Canada).<\/p>\n

You must have been non-tax-resident in Greece for five of the previous six years.<\/p>\n

Athina Kalyva, head of Tax Policy at the Greek Finance Ministry, said the following, when introducing the 7% rate in 2020: \u201cThe logic is very simple: we want pensioners to relocate here, we have a beautiful country, a very good climate, so why not? We hope that pensioners benefiting from this attractive rate will spend most of their time in Greece.\u201d<\/p>\n

You can avail of the 7% rate for up to 15 years.<\/p>\n

The above scheme is called the Greek Non-Dom Regime for Retirees. Greece also has a Non-Dom Regime for Investors, where if you invest \u20ac500,000, you pay a lump sump sum tax of \u20ac100,000 per year, regardless of how high your income goes or your level of wealth. Best of all, foreign-source income is not taxed at all under this regime.<\/p>\n

Spain\u2019s Lower Tax For Remote Workers<\/strong><\/h2>\n

Spain is one of many countries to introduce a digital nomad visa in the wake of the recent boom in remote working (Greece and Portugal have nomad visas too). The aim is to attract mobile workers from around the world.<\/p>\n

And the visa also comes with special tax incentives. You\u2019ll pay a flat tax rate of 24% on income up to \u20ac600,000, and 48% above that. Under Spain\u2019s regular tax regime, by contrast, you hit 30% on income over \u20ac22,000\u2026 45% above \u20ac60,000\u2026 and 47% above \u20ac300,000\u2026<\/p>\n

So, nomad workers in Spain can save big\u2026<\/p>\n

You\u2019ll also save on other taxes. For example, Spain\u2019s standard freelancer visa\u2014but not the nomad visa\u2014obliges the holder to pay up to nearly \u20ac300 a month toward public health cover and a pension.<\/p>\n

Under the digital nomad visa, you must have a contract with a company that has been operating for at least a year, and have been continuously employed by them for at least three months.<\/p>\n

You must be a graduate of a university or business school or have three years of previous work experience.<\/p>\n

After five years on the digital nomad visa, you can apply for long-term residency.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Europe has a reputation for high taxes\u2026 but this isn\u2019t always fair. In fact, there are many low-tax and even-no tax schemes in place in various countries, which investors, businesses, retirees, and even remote workers can take advantage of. These schemes are always subject to change or even cancelation\u2026 so I always advise people to<\/p>\n","protected":false},"author":1,"featured_media":27903,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55],"tags":[],"class_list":{"0":"post-27902","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-retirement"},"yoast_head":"\nMove To Europe And Pay Low (Or Zero) Tax In These 4 Countries | iSafeSpend<\/title>\n<meta name=\"description\" content=\"Europe has a reputation for high taxes\u2026 but this isn\u2019t always fair. 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