As a relatively new tax, it is not surprising that many have been caught unaware of their liability to pay AIMI and, more importantly, how they can avoid the disturbing consequences.
The additional assessment to IMI (Adicional Imposto Municipal Imobiliário) is sending shock waves to individuals and company owners who unwittingly find themselves under the weight of this added fiscal obligation.
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International company structures established in decades gone by to help wealthy owners of property in Spain avoid tax are now a ticking time-bomb for some, as the Spanish tax authorities set their sights on them.
“International company structures, with some owned by double or triple vehicles involving a Spanish company belonging to a foreign company and, in many cases, a Trust on top, were the arrangement of choice recommended by leading international tax advisory firms to wealthy investors from the 70s to the 2000s,” explains Fernando Del Canto.
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Non-resident couple´s rental income(1) Monthly Rental Income(2) 1,500 6,000 12,000 Annual Rental Income 18,000 72,000 144,000 Less Expenses(3) (1,000) (3,000) (6,000) = Taxable Income 17,000 60,000 138,000 Income Tax(4) Flat Rate 28% 4,760 19,320 38,640 Annual Income Tax Due 4,760 19,320 38,640 Tax Due as % of Gross Income 26.
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The law of the deceased’s nationality applies to inheritance. The main laws regulating inheritance are the Portuguese Civil Code, fifth book (articles 2024 to 2334) and book one (articles 62 to 65).
The inheritance process in Portugal is generally governed by the laws of the deceased’s nationality, thereby avoiding potential conflicts of law; however, if spouses have different nationalities, Portuguese law determines that the national law of the country where they both usually reside is applicable.
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At present inheritance tax between spouses or direct line (children, grandchildren, parents grandparents etc.) is exempt, i.e. zero. Other inheritors will pay 10% inheritance tax.
The main laws regulating inheritance are the Portuguese Civil Code, fifth book (articles 2024 to 2334) and book one (articles 62 to 65).
The inheritance process in Portugal is generally governed by the laws of the deceased’s nationality, thereby avoiding potential conflicts of law; however, if spouses have different nationalities, Portuguese law determines that the national law of the country where they both usually reside is applicable.
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A.I.M.I. or additional I.M.I. (rates) At the end of December 2016 the Portuguese parliament as part of the yearly State budget related to 2017 approved a new law also known as: DL 42/2016 of 28-12-2016.
In future we will refer to this as A.I.M.I. which stands for “Adicional Imposto Municipal Imobiliário” a complementary tax to the I.
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Non-habitual residents Portuguese special tax regime Introduction Portugal created a special personal income tax regime for new residents which offers attractive tax opportunities for foreign pensioners.
This summary provides a brief overview and explains the main guidelines and potential implications of this regime for foreigners and Portuguese individuals settling in Portugal after an extended period of living abroad.
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Together with the proposed 2012 Portuguese Budget is a document proposing rectification to the 2003 general property reform. The 2003 changes established a 10 year period to achieve a general revaluation for tax purposes of all property in Portugal.
In addition the Memorandum of Understanding concerning the economic assistance promised earlier this year to Portugal by the EU and IMF established a promise that the conclusion of the general revaluation should be achieved by the end of 2012.
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There is a lot to think about when moving to Portugal. It’s hard enough moving to a different place in your home country, but relocating abroad often involves extra matters to be organised and is simpler to put some on the back burner for a time when life has settled down.
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