Increasingly, YouTubers, Twitch streamers, and others are moving abroad. Particularly popular among German influencers is the Portuguese island of Madeira. A significant reason for this may be the tax benefits, explains streamer “Staiy” in a recent video. But that could soon come to an end.
Madeira and its creators:
- The island of Madeira is part of an island group of the same name in the Atlantic and belongs to Portugal.
- As a German pioneer for emigrating to Madeira, the streamer Simon “Unge” Wiefels, who has been living on the Portuguese island since 2018, is noteworthy.
- Other well-known island residents include the German streamers Reved and AnniTheDuck.
- However, some skeptics insist that content creators are primarily attracted by tax advantages.
Currently, there seems to be a special influx to the Portuguese island. The Twitch streamer ELoTRiX announced his plans to emigrate to the streamer paradise. The Luxembourgish streamer LetsHugo planned his move but then had second thoughts.
The Twitch streamer “Staiy” has noticed that many of his colleagues are heading to the Portuguese island. In a YouTube video, he suspects that many influencers are still ““desperately” emigrating to Madeira while they can still benefit from the existing tax advantages there.
To enjoy the benefits, content creators must act quickly.
Here you can see how Simon Unge became famous:
Summer, sun, tax relief
Why are influencers drawn to Madeira? Pleasant temperatures, beautiful landscapes, low crime rates – all this makes the island of Madeira an attractive place to live. Moreover, the time difference of just one hour makes work easier for German live streamers.
And then there’s the matter of taxes.
How do influencers benefit tax-wise? In Portugal, there is the so-called “NHR status.” NHR stands for “Non-Habitual Resident,” meaning people who move to Portugal from abroad. Since 2009, the Portuguese government has aimed to attract particularly qualified professionals – such as engineers, medical doctors, but also artists and writers – to boost the economy.
Who gets the NHR status? To obtain this special status, one must meet the following criteria:
- One has not been tax resident in Portugal for the past 5 years.
- One has a residence in Portugal or alternatively spent 183 days in a year there.
- The income comes from a legally defined activity.
If one meets these conditions, they can obtain their NHR status for 10 years.
What benefits does the NHR status provide? Once the special status is obtained, one benefits from attractive tax advantages.
- 20 % flat income tax on domestic income.
- 0 % on foreign income (for example, from rentals).
- 0 % wealth tax.
For comparison: the top tax rate in Germany is currently 45%. Especially for the self-employed, like most major creators, emigrating is therefore financially worthwhile. But even bureaucratically, the flat-rate regulation is much simpler than, for example, the German tax system.
Streamers must give up apartments in Germany
Is this actually legal? In order to legally benefit from the tax advantages, it is important not to have any tax liability in Germany anymore.
It is particularly relevant not to have a residence in Germany anymore. This means one must not own any house or apartment in Germany that they regularly use. This can even include rooms in the parents’ house. Additionally, one must not stay in Germany for more than 6 months at a time.
It is actually not relevant whether one serves exclusively German customers, meaning that, for example, as a streamer, one has only German viewers.
If one observes this, along with some other nuances, emigrating for tax reasons is legal. Whether one considers it morally right is, of course, another question.
End of the tax paradise?
There has been a lot of criticism of the NHR system from locals. While newcomers enjoy their tax advantages, workers in Portugal earn less and less. This has become a major issue, especially with the simultaneously soaring rents.
The social divide deepened, leading to nationwide demonstrations.
The government also admits that the original plans have not worked out. The biggest effect of the tax reliefs has been a loss of billions of euros. Therefore, Portugal is now pulling the emergency brake. Starting in 2024, the NHR status is set to be abolished.
What does this mean? If one wants to benefit from the tax reliefs, they must move to Portugal this year. Only those who met the criteria before 2024 can apply for the NHR status.
Those who already have the special status can continue to benefit until the respective 10 years have passed.
For similar reasons, Twitch streamer Marcel “MontanaBlack” Eris had also considered leaving Germany. The 35-year-old has long been frustrated with taxes and bureaucratic hurdles such as the broadcasting license. Additionally, he received a lucrative offer from a casino in Malta.
MontanaBlack wants to leave Germany: “That’s 400,000 € more in my account”
