Ernst Leitz and the Leica Freedom Train
Across Europe, governments are facing mounting financial pressures. Sluggish economic growth, rising defence costs, and ageing populations are stretching public budgets to the limit. In response, nations are unveiling generous tax incentives to attract the wealthy, offering everything from flat-rate deals to exclusive residency perks. These schemes promise investment and revenue, but also stir controversy over fairness and inequality. Which countries are leading the charge, and what exactly are they offering?
Click on to discover Europe’s top tax breaks for the rich.
Italy appeals to expats not only for its lifestyle but also its unique tax breaks, particularly designed to attract high-net-worth individuals seeking fiscal advantages.
Italy may appear to have high personal and corporate tax rates, but it conceals significant incentives for foreigners willing to move and invest in the country.
Italy’s flat tax regime allows wealthy newcomers to pay a fixed annual fee on foreign income, regardless of the amount, making it ideal for very high earners.
The flat tax was recently raised to €200,000 (about US$215,000) annually, doubling the previous fee, yet remains attractive due to the simplicity and potential tax savings involved.
The flat tax regime lasts for up to 15 years and applies only to those who haven't been Italian tax residents for nine out of the past 10 years.
Given the steep cost, this tax scheme is only beneficial for ultra-wealthy individuals seeking to avoid regular income tax on significant foreign earnings.
The lump sum tax replaces traditional planning costs, making it especially attractive to those who already spend heavily on accounting services.
Switzerland offers a lump-sum tax model, known as forfait fiscal, where taxes are based on expenditures, not income, targeting wealthy expatriates with passive income.
Fewer than 0.1% of Swiss taxpayers use this scheme, as eligibility and benefits are tightly controlled by the government and vary by canton.
Instead of taxing wealth or income, certain Swiss cantons calculate taxes based on a person’s living expenses, such as rent or property value.
The tax base must exceed either seven times annual rent or CHF 429,100 (about US$490,000), whichever is higher, ensuring only the rich benefit.
Although the federal government sets a base threshold, individual Swiss regions can raise the minimum further, depending on local financial goals and demographics.
Applicants must not be Swiss citizens and should either be first-time residents or returning after being away for at least a decade.
To qualify, you can’t work or run a business in Switzerland; the scheme is for those with passive income, not active earners.
Tax breaks in Portugal, once a key draw for retirees and wealthy foreigners, have sparked criticism amid rising living costs and housing pressures.
The Non-Habitual Residency (NHR) program allowed foreigners to live in Portugal for 10 years with very limited tax on foreign-sourced income, including pensions.
Under the old NHR system, many retirees paid no tax on their foreign pension income, making Portugal a favorite for wealthy northern Europeans.
Professionals working in Portugal under specific “high value” activities benefited from a flat 20% income tax rate, further increasing the program's appeal.
Countries like Finland and Sweden protested, as they saw an outflow of pensioners taking advantage of Portuguese tax exemptions.
These Nordic nations requested treaty changes with Portugal, allowing them to tax the foreign pensions of expats now living on Portuguese soil.
Portugal has now restructured its tax breaks under the NHR 2.0 plan, narrowing benefits to educated professionals contributing economically to the country.
Qualified individuals can still enjoy a 20% tax rate for up to 10 years, but the definition of who qualifies has tightened significantly.
Foreign pension income is no longer exempt under NHR 2.0 and is now taxed under standard Portuguese income tax rules, curbing retiree incentives.
The EU Tax Observatory highlights how shell companies are used by the rich to legally reduce their income tax burden through corporate structures.
By moving income into a company they control, wealthy individuals delay personal taxes, especially useful in low-corporate-tax countries like Ireland, Hungary, Bulgaria, and Cyprus.
The OECD’s push for a 15% minimum global corporate tax only applies to companies earning over €750 million (about US$830 million), leaving smaller shell setups largely unaffected.
Experts warn that tax planning is complex; personal income, capital gains, wealth, and inheritance taxes must all be considered, not just headline income rates.
Countries like Malta, Monaco, and even Belgium can be surprisingly tax-friendly, depending on how one earns, holds, and spends their wealth.
Despite controversy, many governments argue that the economic benefits from attracting wealthy residents outweigh the cost of tax breaks—a political debate that's far from over.
Sources: (Euronews) (The Guardian)
See also: The best European countries for work-life balance in 2025
Europe’s top tax breaks for the rich
A number of countries are vying to attract the wealthy
LIFESTYLE Money
Across Europe, governments are facing mounting financial pressures. Sluggish economic growth, rising defense costs, and aging populations are stretching public budgets to the limit. In response, nations are unveiling generous tax incentives to attract the wealthy, offering everything from flat-rate deals to exclusive residency perks. These schemes promise investment and revenue, but also stir controversy over fairness and inequality. Which countries are leading the charge, and what exactly are they offering?
Click on to discover Europe’s top tax breaks for the rich.