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Hotels protest future Tourist Tax in Porto

The creation of a Porto Municipal Tourist Tax, which might reach two euros per night, is designed to solve housing problems and omits improvements in the tourism sector, claims the Hospitality Association of Portugal. The City Council explained, “the proceeds of this levy are to be applied in projects aimed at promoting housing for the middle and lower middle class in the historic centre to accelerate the repopulation and curb pressures from real estate development.

Moves on the tax front…

Apart from the increase in Tax on Local Lodging (from net 3,75% to net 8.75%) the State is planning indirect taxes and changes for 2017.

An added assessment, dubbed “Additional Municipal Property Tax (AIMI), will cover the entire ratable value (VPT) with an exemption on the first €600,000. For properties above this evaluation, the rate of 0.3% will apply. Property Owners with outstanding taxes will forfeit this exemption and will have to pay the new levy whatever the VPT.

On the other hand, owners of buildings with ratable values over one million euros should pay less overall tax in 2017 than last year, even with the proposed increase in Municipal Property Tax (IMI), due to the elimination of the 1% Stamp Duty on this type of luxury real estate.

Tax Hike on Local Lodging

In the 2017 Portuguese State Budget there will indeed be a change to the tax on Local Lodging. After heated discussions on Thursday evening, it seems that the Government is not going to increase the overall tax rate to 28%.

Instead, the taxable part of the income will increase from 15% to 35%. This means that the current tax rate of net 3.75% will go up to net 8,75% .

An example:  A Local Lodging owner has an income of 100€.

Until 31.12.2016, a tax rate of 25% is applied to 15% of the 100€,

so 15€ are taxable. On this amount,  the tax rate is 25%.

The result: of 100€ income: he pays 3.75€ to the state.

 

As of January 2017, a tax rate of 25% is applied to 35% of the 100€,

so 35€ are taxable. On this amount,  the tax rate is 25%.

The result: of 100€ income: he pays 8.75€ to the state.

 

Iceland to restrict Local Lodging

In line with Berlin, Iceland wants to restrict tourist letting. New legislation is being introduced that will limit to 90 days per year the allowable offerings to holidaymakers. If this period is exceeded, a additional tax will be applied.

Plastic bags will cost 10 cents

As of February 15, plastic bags in supermarkets and shops will cost tens cents in 2015 including VAT. The Government’s objective is to reduce bag use from 466 to 50 per inhabitant per year.

Good for the Environment and for the Goverment coffers…NALLE logo-red 30%

 

Foreign Vehicles to pay tax

NALLE logo-red 30%Starting January 2015, Portugal will begin taxing tax foreign-registered vehicles that circulate in the country for more 6 months. In related automotive news, petrol tax will increase from €0.05 – €0.65 per litre as of 01 January, diminishing the impact of decreasing petroleum Prices.

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