Get Golden Visa
IMI Official Partner
Europe is struggling with the complex practice of attracting foreign wealth.
Countries like Italy, Portugal, Greece, and the UK are working on changes in their tax regimes while addressing domestic concerns inside of the countries as well.
The latest change is in Italy’s flat tax for wealthy expats, which has doubled.
Portugal, in the meantime, is ready to roll out a new tax regime, NHR 2.0, aiming at tech professionals especially.
Greece, on the other hand, focuses on retirees with its non-dom regime when the UK is about to end its non-dom status.
Broader economic strategies and global mobility reflect many shifts in tax returns.
This all brings up an important question: Is Europe still a haven for the wealthy?
Let’s look further into this topic and explore the changing tax environment in some European countries.
Italy’s Tax Rate: Doubling the Cost for the Wealthy
Italy’s latest move is surprising as the country doubled the flat tax rate for wealthy expatriates.
The tax rate eventually rose from €100,000 to €200,000. This change is a part of Italy’s 2024 budget law. It is a significant shift in Italy’s approach to attracting high-net-worth individuals to the country.
When the government introduced it in 2016, the flat tax scheme was a way to reverse Italy’s long-term brain drain. The tax regime lured wealthy foreigners and Italian expatriates back to the country.
This tax scheme allowed a new foreign resident and Italians to return to Italy after staying at least nine years abroad in order to pay a flat tax on any of their foreign income or assets for 15 years.
In the end, Italy’s tax regime has been credited with attracting more than 2,700 multimillionaire individuals to Italy. The results of this initiative, however, have not always been positive for the locals.
The real estate prices and living costs experienced a surge as a result of the influx of the super-rich in Italy, particularly in Italian cities like Milan.
Italy is still a competitive destination for the world’s wealthy. Italy’s Prime Minister Giorgia Meloni’s government, however, announced the doubling of the tax rate to address mounting public and political concerns.
This new tax may or may not deter the super-rich from choosing Italy as their new home.
The higher levy may deter some, but it does not mean that others will not find Italy’s unique combination of lifestyle, culture, and investment opportunities attractive, even at a higher tax rate.
Portugal’s NHR 2.0: The New Tax Regime
Portugal is among the most favored destinations for expats. The Non-Habitual Resident (NHR) tax regime was a reason for Portugal attracting thousands of wealthy individuals and retirees.
Recently, Portugal announced the new NHR 2.0 as a new tax regime under the Fiscal Incentive for Scientific Research and Innovation (IFICI) Program.
This new scheme aims to attract highly qualified professionals who relocate to Portugal. Their relocation purposes may be for becoming a resident of Portugal or for employment purposes.
The tax regime offers a special 20% Personal Income Tax rate on work-related income for up to 10 years.
Portugal aims to grow its status as a tech hub with this initiative by targeting technology research and innovation professionals.
Greece’s Non-Dom Regime: Benefits for Pensioners
Greece is embraced as a popular European destination for expats and retirees as the country has a favorable non-dom tax policy.
The Greek non-dom status offers a flat tax of €100,000 per year on rich expats residing outside Greece.
These individuals are expected to spend the previous eight years and have a rate of foreign-sourced pension income under certain conditions.
Hence, retirees find spending their golden years in Greece intriguing as there are many advantages to a non-domiciled regime.
The UK’s Non-Dom Status: End of an Era
The UK’s non-dom tax status has been a topic of debate for a long time.
The tax regime offers tax advantages for wealthy foreign residents and allows them to shield their foreign income while gaining from UK taxation.
However, the UK is ending this tax regime in April 2025. Years of criticism led the government to eliminate this non-dom status as many arguments highlighted this non-dom status as an unfair system.
Europe’s Evolving Tax Landscape
Some European countries are known for their tax regimes, especially designed for the wealthy.
The tax environment is evolving, however, and there is a balance between the aim of attracting foreign wealth and addressing local concerns.
To know more about favorable European tax regimes and the Golden Visas that make them possible for non-EU citizens, contact Get Golden Visa today via our website.
