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What has happened? Portuguese Prime Minister António Costa has resigned on November 7, 2023 following police raids on his residence as part of a corruption investigation. Therefore, the legislative initiative to end the preferential tax regime for non-residents (NHR) has now failed and will not be adopted this year.
What does it mean? Portuguese President Marcelo Rebelo de Sousa is expected to accept the prime minister's resignation. But until a new government is formed, António Costa will remain in power, explains Lisbon-based lawyer Madalena Monteiro of NSM Advogados.
Quote. “The current annual government budget that is still in the approval stage and which included provisions for terminating the NHR, will now not be submitted to parliament for a vote, since it was an initiative of the elected government,” says Monteiro.
“According to Article 167 of the Portuguese Constitution, the annual budget proposal becomes invalid if the elected government that presented it resigns. The new government will have to submit a new state budget for 2024, which will not happen before the end of this year. Consequently, the end of the NHR is no longer on the agenda,” the lawyer adds.
The outlook. Of course, the new government could also take the initiative to abolish the preferential tax regime for non-residents. According to experts, new elections will most likely be held in January 2024.
Quote. “The country is unlikely to get back on track until April. Therefore, at this point, I feel confident in saying that the NHR regime will survive until at least the end of 2024,” says Porto lawyer Pedro Catana Pinheiro of Next Lawyers Gali Macedo & Assosiados.
Source: Investment Migration Insider
Photo by Aayush Gupta on Unsplash
