EU member states enticing expat professionals with tax cuts

EU member states enticing expat professionals with tax cuts

EU member states enticing expat professionals with tax cuts

European countries are promising low taxes for wealthy UK would-be expats considering relocation.

According to a recent study, a British professional earning an average of 250,000 euros in an overseas job would pay more tax and social security contributions were he working in the UK than he or she would in no less than five European countries. The countries are Germany, the Netherlands, Ireland, Spain and France.

Savings made are considerable, with an expat in France keeping 27,588 euros more than in the UK. In Spain, taking into consideration all the country’s tax breaks, the amount saved could be 42,545 euros. Even in Germany, where there’s no special rate for working expats, the saving would be around 2,500 euros. The calculations used to arrive at the above figures are a death knell for claims Britain is a favoured tax haven island in a huge European ocean. Getting ahead of the post-Brexit financial services debacle, several European countries are making their points about less taxation in anticipation of the arrival from the UK of hordes of financial sector professionals.

France, for example, had raised taxes in 2012 but, just after the Brexit referendum, it brought in tax cuts resulting in almost half of France –based expats’ salaries becoming exempt from income tax. Expats in Spain pay a special rate of 24 per cent on income under 600,000 euros, whilst the Netherlands gives the first 30 per cent of expat salaries a tax exemption. In Ireland, tax relief is given on children’s school fees, and Belgium allows expats the chance to deduct the cost of home furnishings. Last year, Italy introduced tax relief of 50 per cent for skilled expats arriving from overseas.

Sadly, Britain is doing very little to keep or attract the brightest and best from abroad. Of course, tax rates and exemptions across Europe come with stipulations, with France requiring at least five years’ residence, Spain giving its special rate only to employees getting their wages from an overseas company, Ireland insisting on earnings of over 75,000 euros before tax relief kicks in and the Netherlands stipulating expats can’t work anywhere more than 150kms inside the border. Even so, at least Europe’s trying to keep its expat professionals rather than forcing them out in UK style.

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