Patience runs out with the Portuguese fiscal policy

"Patience runs out with the Portuguese fiscal policy"

"Sweden is on the way to require the renegotiation of a controversial tax agreement with Portugal, in order to stop tax-exempt payments of occupational pensions to the thousands of swedes.n– Time is running out, " says finance minister Magdalena Andersson (S)."

"the minister of Finance on the lines of the Ecofin meetings and one-on-one with Portuguese colleagues, so far in vain tried to persuade the Portuguese government to introduce a tax on private Swedish occupational pensions. But nothing happens and Magdalena Andersson is now considering to take a harder line."

"the core problem is in a tax agreement from 2002, which after a Portuguese tax reform a few years later means that some occupational pensions can be taken out tax-free in Portugal."

"We have no need to renegotiate the agreement in its entirety, but this part needs to be adjusted," says Andersson."

"TT: How long is the grace period gives you Portugal to act in this matter?"

" It's not a long time left before we will require a renegotiation of the agreement. Time is running out, " she says."

"the government of Finland, long ago struggling with the same problem, have in recent days raised the tone firmly towards the Lisbon."

"A new double tax agreements between Finland and Portugal, was finished in november 2016. It was approved by parliament and the president in Helsinki already in the following month. But in Portugal, the government has not even submitted the contract for approval in the parliament."

"to help speed up the process put the government of Finland therefore, in the last week tabled a proposal to the parliament in Helsinki to terminate the existing nearly 50-year-old tax treaty with Portugal, so that it expires in January 2019."

"We expect a decision on this in may or in the beginning of June," says Antero Toivainen, senior advisor at the ministry of finance in Helsinki."

"It means that if Portugal is to the end of the year have not approved the 2016 agreement, it becomes a avtalslös tax situation between the two countries in the eurozone. In practice, Finland, when dubbelbeskatta finns with incomes in Portugal."

"No right to tax."

"Denmark has for similar conflicts, since 2010, no tax treaty with either France or Spain."

"According to most tax treaties Sweden has with other countries, the Tax may levy a special income tax of 25% on the Swedish occupational pension that is paid out to swedes living in other countries, according to Britt-Marie Hallberg, Eriksson, legal expert at the Swedish Tax agency."

"– But when it comes to Portugal, Sweden according to the agreement, not any right to tax the occupational pensions paid out after the work in the individual services, " she says."

"Hallberg, Eriksson adds that the purpose of tax treaties is to avoid double taxation and not to this type of income should be completely tax-exempt."

"When it comes to state and local government occupational pensions Sweden can already today by taxing the recipient in Portugal, provided that they are Swedish citizens."

"the Facts: more and more swedes move to Portugal"

"Sweden entered into in August 2002, an agreement on double taxation with Portugal, which entered into force just over a year later. The agreement means since Portugal reformed its tax system in 2009, among other things, that payments of private occupational pensions to the swedes who settled in Portugal, under certain circumstances, is tax-exempt."

"Many swedes, just in the last year, 777 people, has since chosen to move to Portugal, including a large number of high-income earners from the business world."

"Years Swedes, emigrants to Portugal"

"Sources: Statistics sweden, the Act (2003:758) on tax treaties between Sweden and Portugal"