High taxes are driving the country’s best talent abroad.
Portugal is one of the national teams favored to win the 2026 FIFA World Cup. Yet most of the team’s players don’t play for Portuguese clubs. Despite producing world-class talent, the country faces difficulties in retaining it domestically. This paradox has clear economic implications: Portugal knows how to produce elite talent but fails to create conditions to keep it, reflecting a broader structural challenge affecting its economy.
A country of just 10 million people, Portugal has produced some of the greatest names in modern football, yet most achieve success outside their homeland. Cristiano Ronaldo, trained at Sporting Clube de Portugal, reached the peak of his career abroad, and managers like José Mourinho, who emerged from Portugal’s academic and coaching system, built their reputations at foreign clubs.
Football is only one example of a system that appears to penalize merit through taxation. Portugal ranks as the fourth-highest country in the European Union in terms of fiscal effort, a measure of the effective tax burden relative to income.
Several figures within the sport have identified the origin of this phenomenon as structural rather than sporting. Pedro Proença, president of Liga Portugal and current president of the Portuguese Football Federation, has warned for years that Portugal’s tax framework limits clubs’ ability to compete with foreign leagues.
According to Proença, taxation represents a concrete obstacle across multiple dimensions of Portuguese football. High earners face marginal income tax rates of up to 48%, with additional solidarity surtaxes applied to incomes between €80,000 and €250,000 and above that threshold.
At the same time, clubs face a 23% value-added tax on ticket sales, reducing net revenue from their core activities, and are subject to the general corporate tax regime, which stands at 19% as of 2026. Under these conditions, Proença has called for a “tax shock” to reduce these burdens and allow Portuguese clubs to compete on more equal footing with their European counterparts.
Other European countries have taken a different approach. Italy introduced the so-called regime impatriati, which allows new residents to benefit from a substantial reduction in their taxable income, exempting up to 50% of employment income from taxation for several years. This regime has significantly lowered the effective tax burden on highly skilled professionals, making the country more attractive to athletes and other high earners.
Spain, for its part, implemented the so-called “Beckham Law,” a special tax regime that allowed qualified foreign workers to pay a reduced flat tax rate for a limited period, rather than being subject to standard progressive rates.
Cristiano Ronaldo’s own career illustrates this global dynamic. During his time in Spain, he faced a tax case that was resolved through a settlement in 2019, highlighting the complexity of taxing athletes with global income and underscoring how differences in tax regimes influence mobility decisions. He subsequently moved to Italy, which offered more favorable tax conditions for new residents. His situation reflects growing competition among nations to attract highly qualified talent via tax incentives.
So far, Portugal has not adopted comparable measures. Programs such as the Non-Habitual Resident regime and, more recently, the IRS Jovem tax relief for young workers have had limited impact on retaining domestic talent, failing to alter the structural incentives that shape professional mobility.
Football makes visible a broader phenomenon that affects the entire Portuguese economy. Like players and coaches, engineers, doctors, and researchers frequently build their careers abroad, where they find more competitive economic and tax conditions. Today, approximately 30% of Portuguese citizens with higher education live outside the country, one of the highest rates among developed economies.
Talent moves where incentives are strongest. As incomes rise, so does the tax burden, reducing Portugal’s relative competitiveness.
Portugal may produce some of the world’s best professionals, but as long as structural fiscal and economic disincentives remain in place, it will continue to be a net exporter of talent, investing in excellence that ultimately reaches its full potential elsewhere.
