close
Share with your friends

Portugal – 50% Tax Relief Proposed for Individuals Returning to Portugal

Portugal – 50% Tax Relief Proposed for Individuals

Portugal’s government has proposed a new favorable tax regime for former Portuguese tax residents who decide to return to Portugal.

1000

CONTACTS

Related content

Flash Alert 2018-147

Portugal’s government recently presented the 2019 State Budget Proposal1, which includes a new favorable tax regime for former Portuguese tax residents who decide to return to Portugal.

For the full details, see “Tax Relief for Individuals Returning to Portugal” (October 2018) (PDF 241 KB), a publication of the KPMG International member firm in Portugal.

WHY THIS MATTERS

This new regime may be an option for those who do not meet the criteria for the granting of tax relief under the non-habitual resident regime, thus potentially facilitating a reduction in the individual’s tax burden or, the employer’s, in cases where tax equalization policies apply.

More Details on Proposed New Tax Regime

This special regime provides for a tax exemption on 50% of the employment and self-employment income, applicable to individuals who return to Portugal and meet the criteria to qualify as “tax resident” in Portugal under the applicable tax residency rules in 2019 or 2020 and have not been taxed as tax resident in Portugal in the previous three years. 

Such exemption shall be applicable for a five-year period and shall not apply to those who apply for the non-habitual resident regime.

Next Steps

The budget proposal is currently under review in Parliament.  Measures contained in the draft proposed are subject to change.  It is expected that the budget will be finally approved and enacted by the end of 2018.

FOOTNOTE

1  See Portugal’s draft budget (Proposta de Lei do OE 2019). Also, you may access the budget on the website, for Portugal’s legislature (in Portuguese).

The information contained in this newsletter was submitted by the KPMG International member firm in Portugal.

© 2020 KPMG & Associados – Sociedade de Revisores Oficiais de Contas, S.A., a Portuguese company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal