Posted on 30/10/2012
Travelling East, Cyprus is another country where expats need to brace themselves for possible tax hikes. Larger bills will be all but guaranteed should the country find itself needing to seek an EU bailout.
Meanwhile, Together magazine has reported that more and more couples are conducting long distance relationships. With unemployment rising in many countries, it’s likely that an increasing number of expat couples will have to spend time apart – often as a result of the need to seek job opportunities in other countries.
Portugal’s Austerity BudgetExpats in Portugal are enduring a relentless run of tax increases. Money earned during 2013 will be subject to an additional 4% “extraordinary tax, ” similar to the 3.5% surcharge applied on 2011 earnings.
This, sadly, is just the start. Standard income tax rates are also to be increased, and tax bandings simplified, the result of which will be many people finding themselves in higher tax brackets.
These measures are required to meet the terms of the financial bailout Portugal received from the IMF / ECB “troika” in 2011, but are being widely condemned as a step to far in a country where a deep recession shows no sign of abating and unemployment continues to rise.
More information: Portugal Unveils Controversial 2013 Budget Plan (The Wall Street Journal)
Cyprus Faces a Potential BailoutCyprus is one of the few countries in Europe that still offers favorably low taxes to expats. Unfortunately, these rates may need to increase if the country has to seek a financial bailout of its own.
Cyprus is experiencing financial difficulties, in part due to its close links with Greece, a country going through a well-documented fiscal crisis.
In common with Portugal, Cyprus will be required to impose harsh tax increases on citizens as a likely condition of any emergency loan funding.
Currently, Cyprus expats enjoy a maximum income tax rate of 35% and a generous tax-free earnings threshold of €19500.
More information: Cyprus bailout may cause tax headache for expats (telegraph.co.uk)
EU Countries Tightening up on Residency RequirementsAlthough EU citizens have freedom of movement and residence in any EU country, some member states are imposing strict requirements on those registering their presence.
Each EU member state is free to decide how new immigrants from elsewhere in Europe formalize their residence. In Spain, for example, anyone intending to remain beyond three months must register with the local authorities.
Where previously a passport was the only document required, new expats must now provide proof of income, employment and medical cover before a registration certificate will be granted.
More information: Spain: New Document Requirements for EU Citizens Completing Local Registration (totallyexpat.com)
More Couples Live ApartTogether magazine has reported that an increasing number of couples now live apart for at least some of the time.
Most expats will know couples where one party has to travel “home” or to another country to work. Some do so under duress, those the story describes as “sadly apart.”
While some expats move abroad aware that international commuting is part of the deal, for others these unwelcome changes are simply part of a new economic reality.
More information: Home alone: Living apart, together (expatica.com)
Petrol Prices Down Across the WorldIn one small piece of good financial news, the falling price of crude oil is resulting in falling petrol prices across the world.
Discounts reported include a three-cent per litre drop in New Zealand and a four pence drop in the UK.
With tax increases filling the newspapers, this small financial respite is sure to be welcome news to many.
More information: Petrol prices on the way down (stuff.co.nz)