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Latest on Portugal’s Golden Visa

Apr 17, 2023

The Portuguese Government has released a new draft law indicating that they will keep accepting new applications for the Golden Visa programme until the final legal diploma is published. This termination law is expected to be published no sooner than 60 days from now.

To summarise the proposal, the following points are worth highlighting:

The new law will not have a retroactive effect.
Any new or renewal processes filed before the new legislations published will be accepted.
Pending applications and future renewals will be converted into regular residence permit for Entrepreneurs, also known as D2, without the minimum stay requirement of approximately 183 days per year, keeping the 7 days requirement of the Golden Visa programme.
Applicants can still invest in artistic production, recovery, or maintenance of cultural heritage in the country and residence permits will be granted.
The programme will be terminated once the law is discussed and voted on by the Portuguese Parliament (in two levels of discussion), validated by the President of the Republic, and then finally published.

The current approach is notably distinct from the previous stance taken by the Government and demonstrates a willingness to listen to market pressures and suggestions.

Given the phrasing of the proposal as it stands, we strongly advise investors who are in a position to proceed to take immediate action in order to benefit from the regime. As no transitional period has been established, time is of the essence.

Based on the known agenda of the Portuguese Parliament, we anticipate that the discussion will not commence before May 10th. Given the typical pace of the legislative process, we estimate that it will take at least 45 days to reach a conclusion, assuming everything proceeds smoothly. It is worth noting that political parties will likely engage in discussion and propose amendments during this period, with market pressure likely to influence their considerations - including the potential for a grace period.

As for us, we are committed to closely monitoring the situation and will keep our Clients and Partners informed of any significant developments. Should any questions or concerns arise, we remain available to provide necessary clarifications and support.

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Benefits of Personal Income Tax for Young Professionals

by Diogo Pedro • 07 May, 2024

Over the past four years, young workers who earned their first income as employees or self-employed individuals have been eligible for a tax benefit in their personal income tax, known as 'IRS Jovem”. This benefit is intended to offer young workers the possibility of minimising their tax obligations, allowing for a higher amount of disposable income. To enjoy this benefit, taxpayers are required to comply with the following requirements: Have a complete course of level 4 or higher studies on the National Qualifications Framework (high school level acquired through double certification and aimed at pursuing higher education such as a bachelor’s degree, a master’s degree, or a PhD). Age between 18 and 26 years old. Considered independent, i.e., no longer included in the parent’s household for tax purposes. The specified age limit includes individuals up to 26 years old, inclusive. However, this limit is extended to 30 years old for taxpayers who have completed a degree at level 8 of the National Qualifications Framework (PhD). In 2024, this tax benefit has been improved, with increased tax exemption rates and an expanded range of applications over time. In this sense, upon completing the course of studies required, the individual may qualify for an exemption from personal income taxes for a duration of 5 years, as explained in the following details: 100% of the income in the first year with a cap of 40 times the Social Support Index – “IAS” value (€20.370,40). 75% of the income in the second year with a cap of 30 times the IAS value (€15.277,80). 50% of the income in the third and fourth year with a cap of 20 times the IAS value (€10.185,20). 25% of the income in the fifth year with a cap of 10 times the IAS value (5€.092,60). Moreover, the exemption can only be used once by the same taxpayer and should be requested when preparing and filing the personal income tax return. It is also important to acknowledge that this benefit has implications for withholding tax, allowing adjustments to the value subject to withholding tax. However, be aware that, while the withholding tax rate applied corresponds to the total amount of income earned, it is only applicable to the portion that is not exempt. If you have any questions or need assistance with this or related matters, feel free to reach out . We would be delighted to help you.

Being an urgent process, this legal action has priority over legal actions not deemed to be urgent.

My application has been pending for months with the Immigration Office - AIMA. What can be done?

by Sara Ferreira • 29 Apr, 2024

It is known to the general public that the Portuguese Immigration Office (AIMA) has not been able to timely approve residency authorisation requests within the legal timeframe defined to do so, thus resulting in residency applicants having their applications on hold for months, in some cases even years. One way to tackle this inaction from the Immigration Office is to file a legal action, namely the Subpoena for rights, freedoms and guarantees of the citizens.