The 2024 tax reforms across several popular relocation jurisdictions have altered the attractiveness of many programs that were previously used for personal and corporate tax optimisation. Below is a concise overview of the most significant changes and their practical implications for individuals and businesses considering a move.
Portugal – NHR (Non‑Habitual Resident) Programme
- The NHR regime still exists but its benefits have been substantially reduced.
- New applicants find the tax incentives far less compelling; only those already enrolled are grandfathered and can continue the original 10‑year tax relief.
- Implication: Portugal is now a lower‑priority option for tax‑efficient relocation unless you already hold NHR status.
Thailand – Remittance‑Based Tax System
- Thailand’s previously permissive remittance‑based taxation has been tightened.
- While still usable, the system now imposes stricter conditions on foreign‑source income and the amount that can be excluded.
- Implication: The country remains viable for tax planning, but the reduced flexibility makes it less attractive than before.
United Arab Emirates – Introduction of Corporate Tax
- A 9 % corporate tax was introduced for most businesses, including many free‑zone entities.
- Initial expectations that free‑zone companies would be exempt proved incorrect; only a limited set of exceptions remain.
- Personal income tax remains zero, preserving the UAE’s appeal for individuals.
- Implication: Companies must factor the new corporate tax into cost calculations, while individuals can still benefit from the zero‑tax environment.
Cyprus – End of Non‑Resident Company Structures
- The jurisdiction has removed the ability to easily establish non‑resident companies.
- Forming a company now requires residency or a more complex structure, diminishing Cyprus’s former advantage for offshore corporate setups.
- Implication: Cyprus is less suitable for those seeking a simple non‑resident corporate vehicle.
Romania – Revised Micro‑Business Regime
- The tax threshold for the 1 % micro‑business rate was lowered from €1 million to €60 000.
- Income above €60 000 is taxed at 3 %.
- This change follows EU pressure tied to post‑COVID relief funds.
- Implication: The regime remains low‑tax but is now less attractive for larger micro‑businesses.
Italy – Reduced Incentives for Newcomers
- Italy’s “newcomers” tax incentive program has been scaled back, decreasing the benefits for recent foreign residents.
- The program still exists but offers fewer tax breaks than previously advertised.
- Implication: Italy remains an option, but the reduced incentives should be weighed against other jurisdictions.
Spain – Beckham Law Adjustments
- The Beckham Law (special tax regime for foreign high‑earners) has become easier to qualify for.
- Qualification criteria have been relaxed, though the regime is still more complex than Portugal’s former NHR.
- Implication: Spain now presents a more accessible route for high‑income expatriates seeking to limit tax on foreign income.
Practical Takeaways
- Re‑evaluate relocation plans: Jurisdictions that once offered strong tax advantages may no longer be optimal.
- Consider grandfathering: Existing beneficiaries of programs like Portugal’s NHR can continue under the old rules, but new applicants cannot.
- Corporate structures matter: The UAE’s corporate tax and Cyprus’s loss of non‑resident company options require careful structuring to avoid unexpected liabilities.
- Thresholds are critical: Romania’s lowered micro‑business threshold means businesses must assess whether the 1 % rate still applies to their projected revenue.
- Stay updated: Tax regimes can shift rapidly; ongoing monitoring is essential for anyone relying on these incentives for personal or corporate tax planning.
