Portuguese taxes are a “confiscation” of assets says tax beagle

 In Consultancy, News, Tax

A partner from a leading international tax consultancy has called Portugal’s tax policy little more than an earnings “grab” and has heaped scorn on the government’s decision to end the NHR tax scheme for overseas citizens residing in Portugal.

Pedro Fugas, a partner at EY Portugal, said that the decision to end the Non-Habitual Residents tax regime was like the Government “shooting itself in the foot”.
And the tax expert thinks the government has some leeway to reduce IRS tax using the additional windfall revenues it got from the IRS in 2023 and what it is likely to get in 2024”, since the Prime Minister had already announced a surplus to this year’s budget.
The EY partner in an interview with the online news service ECO that “people in Portugal should have the possibility of having access to a dignified IRS tax. Today it is confiscation”, stopping sort of calling it outright daylight robbery.
The Tax Managing Partner at EY lays out various possible ways of reducing IRS tax including reducing tax brackets (Portugal has some of the most tax brackets of any country in Europe); reducing marginal taxes, and even increasing the limits on tax allowances, all of which could be an indirect way of reducing the tax burden.
But the “elephant in the room” was the Non-Residents Regime (NHR) which he said was a “shot in the foot”.
“It’s a mistake, an act of pure irresponsibility to end a regime that has attracted so much talent and has repositioned the Portuguese economy, and attracted companies that created added value in Portugal”, he added, emphasising that he does not agree with the prime minister when he says that it had “already fulfilled its purpose”.
“These announcements with strong sound bites obviously might have some political advantage, but they are vey dangerous and are very damaging in terms of investment attraction”, said Pedro Fugas.