Wednesday, 17 April 2024
WorldLast call to Spanish assets that want to cross to Portugal

Last call to Spanish assets that want to cross to Portugal

The alarm bells are ringing for great and medium fortunes in the Iberian Peninsula. Portugal, a country that surprised in 2008 with a bid to attract large foreign assets as a method to weather the deep financial and housing crisis that was approaching, will undergo a radical change next year.

Just like the end of golden visa at community level, which involved tax exemptions for foreigners, the Portuguese Government is going to eliminate what its president, António Costa, has described as a “tax injustice that no longer makes sense.” From January 1, 2024, the exceptional tax regime will be abolished by which any foreigner who wanted to join the special regime (RHN) had the possibility of paying only 10% of taxes if they were retired and, in the last two years, also if they were self-employed or qualified workers – workers such as engineers, doctors, architects…-.

This is a question for which some Expert voices already advance a ‘call effect’ or rather, a ‘last call effect’, since it is expected to affect hundreds of tax residents in Spain who are now considering a possible change of residence to another country with tax advantages, such as Portugal. This is what Siro Barro, partner in charge of the Tax Law Department of Escalona & de Fuentes, said in statements to The Economistspeaking of a “now or never”.

There is still the possibility of being covered for 10 years

The key that further increases this “now or never” is that these last few months really symbolize the possibility of benefiting from this tax regime, but without it ending for them in a broad period of a decade. That is, thatThose who make the change before the beginning of next year will be able to enjoy the exemptions for the next 10 years. Hence the rush.

According to the aforementioned expert, there is still another key factor at the national level that must first be resolved to know if Spain will be more attractive in the eyes of foreigners who plan to establish their tax residence. The court Constitutional Court must resolve the appeals filed against the solidarity tax of high fortunes. If this falls due to a ruling against the high court, Spain would be more attractive in the eyes of great fortunes, as the neighboring country abandons its exemptions, balancing the fiscal balance.

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