Last week, I attended a conference for financial creators.

One creator recently moved to Portugal with her husband. But Portugal just revoked the NHR Tax Scheme for New Residents, so her husband wasn’t able to qualify in time to get lower tax rates.

Instead, he’s going to be hitting Portugal’s 40%+ income tax bracket. 😰 

This got me thinking: Is it worth moving abroad for the taxes?

Today in 10 minutes or less, you’ll learn:

• 🤔 How to Math Tax Savings

• 🟰 3 (Realistic) Tax Saving Scenarios

• 🇵🇹 What are Portugal’s Tax Schemes?

• 🇦🇪 Dubai and Netherlands Tax Schemes

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🗺️ Save thousands on taxes by moving abroad (should you do it?)

🎯 Consider your goals

If you’re like most of my readers, you probably have multiple reasons for living abroad.

For example:

• Financial

• Family

• Health

• Lifestyle/travel

Most expats and professionals abroad I meet fit this category.

On occasion, I do meet a die-hard tax escapist, but that’s the exception.

🤓 How to calculate your tax savings

Even if your goal is financial, you have to run the full numbers (not only taxes).

Consider the following:

• Salary

• Bonus

• Cost of living

• Travel expenses

• Your kid’s international school fees (this is a thing!)

Let me illustrate the impact of moving to a low-tax country using three variables:

• Income tax

• Capital gains tax

• International school fees

First up is income tax:

💡 Scenario 1: New Country (15% income tax) vs Home Country (30% income tax)

Assumptions:

• Gross income = US$150,000

• Savings rate = 20%

• New Country income tax = 15%

• Home Country income tax = 30%

Calculations:

• Annual savings = Gross income * (1 - income tax rate) * savings rate

• New Country annual savings = $25,500

• Home Country annual savings = $21,000

• Net difference in annual savings = $4,500

While $4,500 might not seem significant, the kicker is when you invest this amount, continue contributing annually, and compound the balance over, let’s say, 10 years.

You’d gain an extra $67,372 by the end of the 10th year! 🤯

Here’s another scenario that focuses on investment tax, instead of income tax:

💡 Scenario 2: New Country (0% capital gains tax) vs Home Country (15% capital gains tax)