shock for retirees in Portugal

I am no tax expert, but I think the problem with Guernsey is that many of the people who register in Guernsey don't actually live there. There are addresses in Guernsey where hundreds of businesses are registered. The people owning the businesses don't actually live there, but use the tax free status to avoid tax. Possibly that's what's happening in Portugal, which is why the Portuguese government has decide to close the loophole.

PS. I don't actually know. However, I can see that a way of encouraging more capital/wealth into the country is possibly backfiring. Maybe that's why the Portuguese government is changing the tax regime.

I was not thinking of businesses, a different matter, but of people who have moved there and do live there having retired. One in particular has in fact invested vast sums in his home city in the UK.

But they are paying tax Callistemon. They are paying tax on just about everything they buy and pumping wealth into services and employment. Income tax actually produces only a small amount of a country's income.

Reminds me of that Nationwide advert:

"Well, that particular rate is just to hoik people in"

So do people living in Guernsey, in Monaco etc.

If there is a defence, then it should apply across the board to all.

Philip Green?

The same argument would apply to him too

Well, yes, it does. Monaco produces almost nothing, but its population is per capita some of the richest people on earth. The wealth creates jobs for the cleaners, care workers, servants, people running restaurants and shops, etc, etc.

Singapore is similar. The people who own capital/wealth are very rich, but the country produces next to nothing.

The people paying income tax are the workers who are actually doing the work for the very rich people.

There are people in the Conservative party, who want to turn the UK into a mega version of Singapore. That's why some of the keep going on about free ports and all the rest of it.

What you end up with is a handful of people who are mega-wealthy, but produce nothing, and the rest who actually do the grafting and pay the taxes.

It's a return to nineteenth century economics.

One of my favourite museums is the People's History Museum in Manchester. It has lists of how much a handful of people were worth - the sums are mind-boggling. Meanwhile, the majority of people lived in squalour.

Irony growstuff.

Many regions of Ialy are offering houses for sale for 1 Euro - to stop villages dying.

Italy, of course. As said, nothing to do with me. Never been to Portugal, apart from Madeira. Just passing info.

We certainly do pay taxes where we are living now- perhaps just a tad less than in the UK, but with a terrible exchange rate.

Houses were for sale in the UK for £1 for the same reason. Not to stop villages dying but for renovation as homes and not for rent.

yes, same in Italy- they have to be lived in and not holiday homes, or rentals.

Makes sense. Portugal has a huge brain-drain, so with their young people earning and living abroad they need to collect their taxes from the demographic most able to stay! Without taxes they wont be able to develop the country in ways that will enable their young people to stay work and live more.

Got it in a nutshell notanan. How on earth could anyone possibly be surprised that taxes would have to be paid by all citizens? Portugal isn't a rich country and, as you say, with so many of the younger generation having emigrated to other countries, where else was revenue to be raised?

The surprise is because it is a big change from the current situation. I know several people who are retired in Portugal, or were intending to retire there. Partly for this reason, partly for others. Will be interesting to see if some will leave or not go there.

As said, nothing at all to do with me, or anyone close to me.

Well jura, if some will leave or not go there, just because they don't want to pay taxes like the rest of the country, they'll be no great loss to Portugal will they? Very few countries can afford free loaders these days.

I just can’t get worked up about this.
As I see it everybody has to pay taxes somewhere so if you choose to retire abroad, surely you expect your income to be taxed here? Or should it be taxed at source, which puts an end to retiring to tax havens - goodbye Monaco or Cayman Islands, hello Bognor Regis.
In any case income tax only forms part of the taxation system anyway, so indirect taxation such as VAT/purchase tax or the equivalent must apply to everybody.
How else are essential sources funded?
So what is the relevance of this thread?

“Taxed there , not “here” “

Maw- I am not worked up about this at all. Just sharing info I had read today. And yes, I consider it normal to apy taxes- but there are some countries people choose to go to because they don't. Malta too. And Portugal recently.

It would appear that certain "activities" will still benefit from the Non-Habitual Resident tax regime:

www.lexology.com/library/detail.aspx?g=d343f685-dc44-4d9d-ae5a-fef9eb3a66ea

Sorry, can't copy the text, so you'll have to click on the link.

Interesting, because Portugal appears to be using its tax system rather than a points-based immigration system to attract the people it still wants to come to the country.

I could be wrong, but I don't think this is so much about getting more money from certain groups, but limiting the number of people from certain groups who are attracted to living in Portugal.

PS. Unemployment in Portugal (although still quite high at over 6%) has halved over the last few years.

but there are some countries people choose to go to because they don't. Malta too. And Portugal recently.

So tax evasion then?
Just like Philip Green

Chewbacca They're not freeloaders because they spend their money in Portugal, which boosts the economy. The Portuguese government has, in the past, quite deliberately wanted to attract high net-worth retirees, who haven't paid tax on their pensions (wherever they're paid) and other sources of income. The Portuguese economy has benefited from having them.

Maybe the decrease in unemployment means that Portugal is on the road to recovery and doesn't need to attract wealthy foreigners to quite the same extent. Nevertheless, it still wants skilled people and, apparently, is a magnet for professional Brazilians. Obviously, they share a language, but Brazil isn't in the EU, so this is a way to tempt them.

Yes, just like Philip Green. (Hasn't he already been mentioned?)

I would imagine the problem with people like Philip Green is that much of his money isn't invested in the country where he lives, although some will be. He probably has an office in Monaco, which charges him fees for managing his finances.

Maybe the Portuguese government has done its sums and has worked out that other rich retirees are doing the same, ie not actually spending the money in Portugal, but using it as a base to invest globally.

PS. MawB I think Bognor Regis would have to build a few more top class golf courses and improve its weather before it became more attractive than the Algarve .