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British Registered Sole Trader Paying Tax in Portugal

2550 Views 2 Replies 2 Participants Last post by  canoeman
Hello Again

Thank you all so far for your kind help with regards to the car situation I posted on in the last week or so... We have gained a lot of useful info and top tips with regards for getting a car over to Portugal, or not!

Now it's time to get serious with making sure we are 100% above board and legal to be in Portugal.

So, our situation is as follows:

Both UK citizens

Both with E111 cards, EU driving licences and British Pass ports.

I will be volunteering 6 hours each day for food and board and therefore will not be earning any money at all.

My BF is a British registered Sole Trader. He has liability/indemnity/business insurance all sorted from the UK. The next thing is paying taxes....!!!

According to HMRC, tax is paid based on where you do the work.

So at the end of next April, he will present a detailed account of income/expenditure to an accountant in the South Algarve, assuming we stay there until then so that he can legitimately pay tax. Under the double taxation treaty he will then be exempt from paying UK tax as well.

As he is freelance photographer, this involves wordly travel. So we have no idea how long we will stay in Portugal. He can operate his business from anywhere as he will not have premises.

As we are EU citizens, surely we don't have to get "residentia"? It's not like we have kids and are committing to living in Portugal for a long time, we are simply going to see how successful we are at finding what we are looking for...

SO what I would appreciate help with is:

finding a good accountant with expat experience, professional photographer experience


Do we really need to register residentai being that we are EU residents already? (Also he will not be getting paid by Portuguese companies for his work as a matter of fact, the majority of his income will come from people buying his artwork online which may not even be Portuguese people.... he will just be taking photographs in Portugal... if that makes a difference?).

Thanks in advance for all your help and advice, this is a great forum!

Rach :)
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Residence in a EU country is all about taxation and N.I, no country wants you to escape their clutchs.
As a EU Citizen you can live (if you have the means), work, study or retire to any EU country.

EU regulations are very clear you cannot be a Resident of more than 1 EU country at a time (but if you don't organize yourself correctly you can be classed as a tax resident of more than 1 country)

Basically the regulations are the same for each EU country, which reguire you to Register your presence within 30 days of 3 months with some slight variations on where and how you register that Residence .

As a Portuguese Resident you are required to file a tax return yearly, declaring your Portuguese and worldwide income, some of which you might have paid UK tax on. The Portuguese Tax year is Jan to Dec, returns for 2012 filed March/ April 2013.
Definition of a Tax Resident in Portugal
"There shall be considered as resident in the Portuguese territory any person who, in the year to which the income relates:
• Stays there more than 183 days, with or without interruption;
• Having stayed there for less than 183 days, has at his own disposal on 31st
December of that year a dwelling place in such conditions that it may be inferred that there is the intention to keep and occupy it as an habitual abode;"

When you change Residence to any EU Country from UK, your E111 or EHIC card as it now known is not valid, and your D/L must be registered or exchanged.

I'm not suggesting your trying to evade payment of tax or N.I in either country, but I think you need to question why or for how long you want or might to move to Portugal for, how important your UK Residence is too you (which you lose if you transfer to Portugal or don't reside in UK for 183 days) as it seems your BF's present sole trader benefits are better as UK Residents than they would be as Portuguese residents.

Slightly confused though as I thought you said he had employment here?
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I was just checking on a pension/health matter for ourselves, I'd suggest you download or get a copy of DWP publication SA29 which covers a lot of topics relevant to your situation and plans

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