From 2024, Portugal will no longer offer this offer Tax benefits for pensioners come from abroad, as Prime Minister Antonio Costa announced. A decision motivated by concern that these benefits would be possible Drive the rise in real estate prices in a time of crisis on the real estate market.
Tax relief in Portugal for pensioners, initially granted to foreign residents who spent at least half the year there, it became fully available by 2020; Previously, those who decided to move to Lisbon and the surrounding area were exempt from paying pension tax for ten years. Subsequently, newcomers were able to benefit from a 10% tax reduction. Around 10,000 people benefited from these benefits, mainly pensioners from France, the United Kingdom and Italy, who settled mainly in Lisbon and the Algarve. These foreigners have played an important role in the recovery of the Portuguese real estate market.
However, there are still many countries that can be considered “tax havens” for pensioners.
The states you can move to as a retiree to spend less
Many retirees are looking for jobs favorable tax systems settle down. These places usually offer tax advantages such as exemptions or discounts on income, pensions or the importation of personal goods. Here you are:
Spain (Canary Islands)
Spain offers tax relief for foreign pensioners, who can benefit from tax exemptions or reductions on income from foreign sources. As part of Spain, the Canary Islands are subject to the Spanish tax system, which provides deductions for medical expenses, including medicines and medical care. In addition, pensioners who receive a pension from abroad can benefit from tax advantages depending on the country of origin of the pension.
In general, tax rates on the Canary Islands are lower than in Italy. However, the amount of tax benefits decreases as income increases. A crucial factor to consider before deciding to move to the Canary Islands as a retiree is the IRPF, which is the income tax for residents of the archipelago who stay there for at least 183 days a year.
Similar to Italy, the tax system is progressive, with tax rates varying depending on income. For example one19% rate for income below 12,450 euros, of 24% up to 20,200 euros, of 30% for income up to 34,000 eurosand can achieve it 45% for income over 60,000 euros.
Otherwise, natural persons who are not residents of the Canary Islands are subject to the IRNR, a tax that affects income from both domestic and foreign sources. In this case, the rate on total income is 19%.
Moving to Malta as a pensioner can offer various advantages, especially from a tax perspective. The Maltese government has introduced a tax system specifically designed for this purpose Recipients of foreign pension incomewith the aim of promoting the settlement on the island not only of people of working age, but also of people with other regular sources of income.
Is called Malta Pension Scheme and provides for preferential taxation with a fixed tax rate of 15% on income from abroad. This means foreign pensions are taxed at 15%, which can be a significant tax saving compared to other jurisdictions. However, other income earned on the island is subject to oneRate of 35%.
The rules for participating in this program are different: you must, among other things, be a citizen of a European country, not be a Maltese citizen or resident in Malta, not have a job and receive a pension equal to at least 75% of total taxable income. There are also real estate requirements, such as:Buy a property worth €275,000 or more in Malta or €250,000 on Gozo; or enter into a rental agreement of at least 12 months, the rent of which is at least €9,600 per year if based in Malta, or €8,750 if based in Gozo instead.
With the approval of Law No. 4172/2020, the Hellenic Peninsula introduced tax relief for pension income. The tax is aInterest rate of 7% for 15 yearsHowever, in order to receive these benefits, an application must be submitted to the relevant Greek tax authority by March 31st of each year.
In order to submit the application, some requirements must be met:
- Request it Residence in a Greek city.
- Have a… regular rental agreement or buying a property in Greece.
- Open one Current account with a Greek banking institution.
- To be Subscribers to AIRE (Register of Italians living abroad).
- Have not lived in Greece for at least 5 of the 6 years before submitting the application.
- Retirees who move their tax residence to Greece will have to spend money spend at least six months and one day a year in the country.
However, be careful. The benefits are aimed at former private sector employees, former public servants or pensioners who receive a pension from a private insurance company, but are not available except in the case of group insurance that large corporations take out for their own employees.
Pensions are taxed at two tax rates, the calculation of which is based on the nominal 24% and 36% of income tax. However, the effective taxation of pensions is reduced by 50%, resulting in this two effective rates of 12% and 18% for two income levels. The rate of 12% applies to pensions up to around 2,300 euros per month. The 18% applies to the pension amount that exceeds 2,300 euros per month. Anyone who decides to transfer their pension to Croatia will receive the gross pension without tax withholding and will pay taxes according to the rates applicable in the destination country.
However, it is important to note that moving abroad does not have to be just a formality; You must actually reside in the chosen country, including Croatia at least 183 days a year (i.e. half the year). Neither domicile nor domicile should be maintained in Italy. The next step is entry in the register of residents abroad (AIRE). This is the request for deletion from the register of the municipality of residence in Italy. Registration with AIRE must be completed within three months of arrival in the new country. Registration with AIRE results in the cancellation of residence in Italy and the possibility of benefiting from the tax rates of the destination country, in the case of Croatia.
It applies to foreign pensioners who transfer their tax residence to Romania a special tax rate of 10% for pensions. This represents a much lower income tax than in many other countries, including Italy, where the tax rate on retirement income is generally higher.
This tax rate is not a special benefit, but rather the standard rate for income tax in Romania. Consequently, foreign pensioners who transfer their tax residence to Romania can benefit from this preferential taxation.