When Cristiano Ronaldo left Real Madrid and headed to Italy to play for Juventus, few observers noticed the fiscal logic that was hidden under this surprising sporting decision. As explained Free market, The Portuguese star did not simply change his residence, but did so by taking advantage of a special regime that substantially reduced his tax bill.
The key is in a law that allows you to pay a maximum of 100,000 euros per year in concept of international income obtained from concepts such as image rights. The measure came into force in 2017 and entails its application for a period of fifteen years. Cristiano Ronaldo then received around 120 million dollars in annual income, the bulk of which came precisely from international sources, invoices from the sale of his image rights. Therefore, his move to the transalpine country meant he had to pay a symbolic amount of taxes on said income. In practice, their tax bill was less than 1%…
Marc Cantavella, co-founder of the tax consultancy Relocate&Savespecialized in processing taxpayer transfers to low-tax jurisdictions, explains to Libre Mercado that this model has not received as much publicity but, in 2021 and 2022, it enabled the entry of more than 500 new residents, all of them with large assets and /or very high salaries
“In fact, the system originally designed in Italy has also been replicated in Greece. As is known, the Greek country needs to reduce its public debt, grow as much as possible and, ultimately, turn around what was twenty disastrous years for its economy. Therefore, they are implementing a model similar to the Italian one and, for a few years, anyone who invests 500,000 euros in the country (whether in the real estate sector, in public debt securities or buying shares in existing companies or newly created) has the possibility of benefiting from this regime,” says the prosecutor.
The Greek model charges a flat rate of 100,000 euroswhich are increased by 20,000 euros if you wish to include in this tax regime for another first-degree relative (parents, spouses and children). The application of these advantages also extends for 15 years, although it requires a minimum of 183 days of effective residence on Greek soil. Obviously, this regime is not of general interest for high-income people, since an annual payment of 100,000 euros represents a significant outlay, but it is a very reduced level of taxation if we think about the case of millionaire taxpayers, who are accustomed to pay much larger amounts to the Tax Agency of their countries of origin.
“There are many Britons who are taking advantage of this model because they know the country, they have spent their summers there over the years and now, given the announcement of this tax regime, they have decided to move there. It is also a mechanism that has been called the attention of people from other countries that are not part of the European Union, such as Turkey,” explains the co-founder of Relocate&Save.
Cantavella recognizes that, “for digital nomads and young professionals, the reference destinations are other. Estonia It has a digital citizenship model that combines very well with a single-rate Personal Income Tax and a Corporate Tax that exempts reinvested profits from taxation. Malta y Cyprus “They also provide tax advantages of special interest to this type of people, which is why they have become highly desired destinations for those who want to live in countries with good climate and low taxes, but without leaving the European Union.”
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Portugal used to appear in that same category, but the changes announced by the outgoing government of former Prime Minister António Costa threaten to alter this situation. However, “it is important to emphasize that there are other interesting models in Southern Europe. For example, In Italy and Greece there are different tax discounts that allow you to pay a fixed rate of 7% to those who move to these countries.”
He Italian model and the Greek replica
He Italian model which Cantavella comments started in 2019 and is enabled for all those people who have not lived in Italy in the last five years but choose to move to the transalpine country and, once there, establish their residence in towns with less than 20,000 inhabitants located in eight regions of the country (namely, Abruzzo, Apulia, Basilicata, Calabria, Campania, Sardinia, Molise and Sicily) or in towns of less than 3,000 people that are in the aforementioned eight regions or in the demarcations of Umbria, Lazio and Le Marche.
Greece has also explored these types of tax advantages, in its case with a system focused on attracting pensioners from other countries. The amount required of these new residents is reduced to 7% and is applied to all their income, not just those from retirement. The model also extends over a period of fifteen years.
2023-12-21 06:30:42
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