The end of the Non-Habitual Resident (RNH) tax regime is having effects across the border, with Spanish authorities increasing scrutiny of taxpayers who transferred their residence to Portugal in recent years.
The Spanish Tax Authority is intensifying control over supposed fictitious changes of tax residence to Portuguese territory, at a time when the RNH was definitively closed on January 1, 2025. According to the Spanish economic newspaper El Economista, the focus is mainly on remote workers, pensioners and high-net-worth taxpayers who sought to benefit from the tax advantages in force at the time.
Created in 2009, the RNH regime allowed foreigners not to pay taxes on certain income obtained abroad and applied a reduced flat rate to income generated in Portugal. As of 2020, pensions began to be taxed at 10%, still below the maximum rates practiced in Spain, where income tax can reach 48%.
Portugal decided to eliminate the regime in December 2023, maintaining only a transitional period during 2024 for those who had already started the change process in the previous year. Since 2025, the new tax framework only applies to highly qualified professionals in areas such as science, health or technology.
Limitation period on the Spanish tax radar
According to the same source, Javier Fernández, tax specialist and head of the tax department at dPG Legal, explains that the Spanish tax authorities are particularly attentive to taxpayers who moved to Portugal from 2021 onwards. The reason is simple: tax debts in Spain expire after four years.
Those who left in 2021 submitted their income declaration in 2022, maintaining the limitation period until 2026. Cases relating to 2023 and 2024 may still be analyzed in the coming years, as the legal deadlines approach the limit.
TEAC decision reinforces understanding
The reinforcement of control also comes in the wake of a decision by the Spanish Central Economic-Administrative Court, dated May last year. The body clarified that taxpayers who used the Portuguese regime may continue to be considered tax residents in Spain if they are not subject to taxation on worldwide income in Portugal.
In practice, the simple presentation of a Portuguese tax residence certificate may not be enough to rule out qualification as a resident in Spain.
The court’s understanding is based on the Convention to Avoid Double Taxation between the two countries. According to this interpretation, the convention does not apply to taxpayers who, although considered residents under domestic law, are subject only to limited taxation on income obtained in that State.
Previous resolutions, from June 2024, had already followed this line, now reaffirmed after the Spanish Supreme Court did not comment on the issue in judgments in July of the same year.
“There cannot be fiscal statelessness”
Also according to Javier Fernández, cited by the same source, the principle is clear: there cannot be fiscal statelessness. A taxpayer must be considered resident in one of the two countries and pay taxes in that territory on all of his income.
Therefore, the transfer of residence with the sole aim of avoiding taxation may be classified as fraudulent by the Spanish authorities, if it is concluded that there was no effective change of center of interests or life.
A regime that marked an era
Between 2009 and 2024, the Portuguese regime attracted more than 1.5 million foreigners, according to official data cited by . It is estimated that beneficiaries have saved around 1.7 billion euros per year in taxes.
The impact of the regime fueled internal debate in Portugal, particularly around tax inequality and pressure on the real estate market, factors that were the basis for the decision to close it.
With the definitive end of the RNH and the reinforcement of supervision in Spain, taxpayers who changed their tax residence to Portugal now face a context of greater scrutiny and coordination between tax administrations, within a framework of more rigorous application of double taxation rules.
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