The 2019 State Budget created the Regressar Program, designed for Portuguese emigrants and encouraging their return to Portugal by implementing tax benefits for the emigrants that meet the requirements set out by the Program.
In accordance with the added Article 12 – A-Tax Regime applicable to former residents - to the Personal Income Tax Code, former residents will have 50% of employment or self-employment income and business and professional income excluded from taxation if they meet the following cumulative requirements:
· Have not been considered Portuguese residents in the three years previous to 2019 or 2020;
· Were Portuguese residents before 31-12-2015;
· Become Portuguese tax residents in 2019 or 2020, in accordance with Article 16, number 1 and 3 of the Personal Income Tax Code;
· Have not applied for the Non Habitual Resident Program; and
· Have their tax situation in compliance with the Law.
This regime is applicable to the income earned in the first year in which the resident meets the requirements mentioned above and for the next four years, and ceases after the production of all the effects in respect to the residents who only meet the requirements in 2020.
This is a tax benefit with automatic effects, since its effects are immediately derived from the law by the simple verification of the respective requirements which means that it does not depend of any act of recognition by the Tax Authorities, and is made with the submission of the tax return.
Lisbon, 28th June 2019
By Geoffrey Graham, Senior Partner at EDGE International Lawyers
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