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Global Tax Changes 2025

Global Corporate Tax Rates 2025

Taxation Changes EU 2025

Capital Gains Tax Rates EU 2025

Global Tax Changes in 2025: What Expats Need to Know

 

 
With the arrival of 2025, several significant tax changes are set to affect expatriates and those planning to move abroad. From tax cuts and incentives to new levies on real estate and pension transfers, let's have a look at the latest developments in popular expat destinations:

Sweden: Tax Reductions for Foreign Workers

Good news for expatriates in Sweden! The Swedish government has unveiled its 2025 Finance Bill (PFL 2025), which includes a tax reduction aimed at stimulating economic growth, particularly after two years of stagnation. Among the highlights, investment-savings accounts will now benefit from tax exemptions on returns up to 150,000 crowns, allowing savers to keep more of their earnings. Small and medium-sized enterprises (SMEs) will also receive tax relief to ease their financial burdens and encourage job creation.

While the tax cuts include reductions in gasoline, diesel, and air transport taxes—which some environmentalists might find concerning—the Swedish government remains committed to environmental goals. To support green technologies, it will offer tax incentives with simplified applications for both local and foreign residents, especially for low-income households and seniors aged 66 and older.

Spain: New Tax on Real Estate for Non-Europeans

In an effort to address its housing crisis, Spain has introduced a new tax targeting foreign real estate investors. Under this reform, non-European buyers will face a 100% tax on real estate purchases. This comes after the discontinuation of the Golden Visa program, and while some argue this tax will deter foreign investment, others see it as a necessary response to the ongoing housing shortage.

In addition to this, a new waste tax, tobacco-related product taxes (including e-cigarettes starting in April), and a diesel tax are set to affect both locals and expatriates. The waste tax will cost expatriates between 165 and 200 euros annually, while the VAT on electricity will rise to 21%, resulting in an additional 110 to 120 euros in annual expenses for expatriates. However, Spain has maintained its reduced VAT on basic necessities.

France: Impact of 2025 Tax Increases on Expats

In 2025, self-employed expatriates in France will see their social contributions recalculated based on actual income. Those with lower earnings may benefit from a slight reduction, while higher earners will face increased contributions.

A significant change for expatriates in France will be the unemployment insurance reform that takes effect in January 2025. Those returning to France and registering with France Travail (formerly Pôle emploi) will face new eligibility requirements for unemployment benefits, which will now be calculated monthly. Seasonal workers will benefit from a reduction in the required work duration for compensation eligibility.

United Kingdom: Overseas Transfer Fee Tax Changes

The UK government has proposed a significant tax overhaul, raising an estimated 40 billion pounds annually for public investments. However, British expatriates will be affected by a change to pension transfer rules. Starting in April 2025, British retirees living abroad will have to pay a 25% tax on pension transfers, even within the European Economic Area (EEA) or Gibraltar—areas that were previously exempt. This change could impact expatriates planning to transfer pensions abroad and reduce the attractiveness of QROPS (Qualifying Recognized Overseas Pension Schemes).

Additionally, the UK has announced that from 2027, pensions will be subject to inheritance tax at a rate of 40% on estates above 325,000 pounds, forcing expatriates to reconsider their retirement savings plans.

Portugal: Tax Incentives for Foreign Talent

Portugal continues to attract global talent with the introduction of the Tax Incentive for Scientific Research and Innovation (IFICI), replacing the previous Non-Habitual Resident (NHR) regime. IFICI targets highly qualified professionals and entrepreneurs, offering a flat 20% tax rate for ten years. To qualify, individuals must work in professions deemed critical to the Portuguese economy and hold at least a bachelor’s degree or doctorate.

This incentive is part of Portugal’s broader efforts to boost innovation and attract foreign investment, particularly in sectors like technology, research, and engineering. The initiative also offers exemptions from taxes on most foreign income, though higher taxes apply to income from countries on Portugal's blacklist of non-cooperative jurisdictions.

Canada: Tax Exemption for Consumer Products Extended

In Canada, the government has extended tax exemptions on certain consumer products until February 2025 in an effort to combat inflation. Additionally, Canada has delayed an increase in the capital gains inclusion rate until 2026, providing some temporary relief for investors. However, electricity rates in Quebec will rise by 3% for residents and businesses, starting April 1, 2025.

The tax credit for career extension in Quebec will also be limited to workers aged 65 and older, removing eligibility for those aged 60 to 64. This change has drawn criticism from those who argue it could harm financial security for those nearing retirement.

United States: Suspension of Customs Tax Increase

In a surprising move, the U.S. has suspended its planned increase in customs taxes on imports from Mexico and Canada. This reversal of a previous pledge to hike taxes by 25% offers temporary relief to foreign companies. However, the situation remains volatile, with the U.S. also considering new tariffs on China and the European Union, potentially escalating into a trade war.

Despite these tensions, President Trump has proposed a reduction in corporate taxes from 21% to 15% for foreign companies that relocate production to the U.S., though this could face challenges due to the country’s rising public debt.

China and the European Union: Rising Tariffs and Trade Tensions

China is facing a potential 10% tax increase on top of existing tariffs, with the European Union also targeted by similar measures. This escalating trade war threatens global commerce, as countries retaliate by imposing tariffs of their own. Chinese businesses have criticized the U.S.'s import bans, while Canada has started boycotting American goods.

These trade tensions could significantly disrupt global trade and affect expatriates and foreign businesses in both the U.S. and China, raising the stakes for international investments.

The global tax landscape in 2025 is marked by a mix of tax reductions, new levies, and significant reforms, particularly for expatriates. Whether you’re planning to relocate, already living abroad, or looking to manage your retirement savings, it’s important to stay informed about the latest tax changes and how they might affect your financial planning.