Portugal’s will-they-won’t-they relationship with foreign workers has just taken another twist, as the country plans to bring back contentious tax

Desperate for growth, Portugal backtracks on hostility to digital nomads as its tax breaks for skilled foreigners return

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2024-07-07 11:00:05

Portugal’s will-they-won’t-they relationship with foreign workers has just taken another twist, as the country plans to bring back contentious tax breaks that its old Prime Minister called a “fiscal injustice.”

The country’s Prime Minister Joaquim Miranda Sarmento told the Financial Times that his center-right government would bring legislation on Thursday to reintroduce tax breaks to lure foreigners to Portugal.

Sarmento said the switch is part of a body of legislation aimed at stimulating Portugal’s economy and “attracting some people to the country.”

The country scrapped the 20% flat tax rate charged to those in “high value-added” jobs like doctors, tech workers, and journalists in October. Instead, skilled foreign workers would fall under the same progressive tax rate as Portuguese citizens, ranging from 14.5% to 48%.

The decision was expected to deter high-skilled foreigners from migrating to Portugal, who would face higher charges on income earned there.