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Discussion Starter · #1 ·
Hi,

Hope you are all keeping well, I am hoping for some advice on tax in Portugal.

I am from the UK and have been living in Malta for the past 4 years, I have a company which is registered in Malta and i will be relocating to Portugal in March 2014.

I am wondering how many days I can stay in Portugal before paying local taxes, my company will still be based in Malta and there is a double tax system in place so I would only have to pay tax the once, however if i stay in Portugal over the allotted days allowed then do i have to pay tax in Portugal?

None of my work comes from sources within Portugal as my work is all over seas and outside of Europe.

if I do have to pay taxes in portugal, would anyone knw how much it would be? also I have noticed that there is this 10 year income tax exemption for expats?

If anyone has any advice it would be greatly appreciated.

Kindest Regards

Owen
 

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If you stay in Portugal longer than 3 months you must register your Residence, a registered resident must make a yearly tax return and declare worldwide income, if tax paid in Malta with a dual tax agreement in place then you shouldn't be taxed twice on same income.

There are 2 further definitions of a Tax Resident.
• he/she has stayed in Portugal for more than 183 days (not necessarily consecutive days) during the tax year
• he/she possesses a house in Portugal at 31 December of the relevant year with the intention to use and occupy it as habitual residence
• at 31 December of the relevant year, he/she is part of the crew of a ship or an aircraft on duties by entities with a residence, headquarters, or effective management in Portugal
• he/she is working abroad as a public servant of the Portuguese state.

There is a non Habitual Residence scheme lots of information on here but it's not an exemption it's a basic rate tax @ 20% but varies depending on source of income whatever you intend you should take advice from accounts who have a thorough knowledge of Portuguese and in your case Maltese Tax Law.

If you remain a Non Resident then you only have to file a return and pay tax on Portuguese earnings
 

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Discussion Starter · #3 ·
If you stay in Portugal longer than 3 months you must register your Residence, a registered resident must make a yearly tax return and declare worldwide income, if tax paid in Malta with a dual tax agreement in place then you shouldn't be taxed twice on same income.

There are 2 further definitions of a Tax Resident.
• he/she has stayed in Portugal for more than 183 days (not necessarily consecutive days) during the tax year
• he/she possesses a house in Portugal at 31 December of the relevant year with the intention to use and occupy it as habitual residence
• at 31 December of the relevant year, he/she is part of the crew of a ship or an aircraft on duties by entities with a residence, headquarters, or effective management in Portugal
• he/she is working abroad as a public servant of the Portuguese state.

There is a non Habitual Residence scheme lots of information on here but it's not an exemption it's a basic rate tax @ 20% but varies depending on source of income whatever you intend you should take advice from accounts who have a thorough knowledge of Portuguese and in your case Maltese Tax Law.

If you remain a Non Resident then you only have to file a return and pay tax on Portuguese earnings
Hi,

Thank you very much for your detailed information, sorry if i ask another question, where would i pay tax to Malta or Portugal?

Kindest Regards

Owen
 

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Discussion Starter · #4 ·
If you stay in Portugal longer than 3 months you must register your Residence, a registered resident must make a yearly tax return and declare worldwide income, if tax paid in Malta with a dual tax agreement in place then you shouldn't be taxed twice on same income.

There are 2 further definitions of a Tax Resident.
• he/she has stayed in Portugal for more than 183 days (not necessarily consecutive days) during the tax year
• he/she possesses a house in Portugal at 31 December of the relevant year with the intention to use and occupy it as habitual residence
• at 31 December of the relevant year, he/she is part of the crew of a ship or an aircraft on duties by entities with a residence, headquarters, or effective management in Portugal
• he/she is working abroad as a public servant of the Portuguese state.

There is a non Habitual Residence scheme lots of information on here but it's not an exemption it's a basic rate tax @ 20% but varies depending on source of income whatever you intend you should take advice from accounts who have a thorough knowledge of Portuguese and in your case Maltese Tax Law.

If you remain a Non Resident then you only have to file a return and pay tax on Portuguese earnings
Sorry to bother you once again, would you maybe know any accountants that would be knowledgable in this area?

Kindest Regards

owen
 

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if your Maltese income was taxed in Malta then there but I'm not familiar with Malteses Tax Laws so don't know how residence affects it etc.

If you had to make a Portuguese Tax return then you declare any income & taxed paid in the other country/ies if treaty in place there should be no extra tax on same income but if there was here

Afraid it's the big boys like KMPG, Price Waterhouse, AIECP Portugal possibly Finesco on the Algarve
 

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Discussion Starter · #6 ·
if your Maltese income was taxed in Malta then there but I'm not familiar with Malteses Tax Laws so don't know how residence affects it etc.

If you had to make a Portuguese Tax return then you declare any income & taxed paid in the other country/ies if treaty in place there should be no extra tax on same income but if there was here

Afraid it's the big boys like KMPG, Price Waterhouse, AIECP Portugal possibly Finesco on the Algarve
Thank you very much, would you have any indication - if i was to form the company in Portugal and pay taxes there, how much it would be?

Sorry for the questions, it seems like this is another option to explore.

Kindest Regards

Owen
 

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Depends on what you earn, how the company is set up and also which tax regime you work under, the Simplified Regime as an example if turnover is <150,000€ then varies slightly with trade, service allows a fixed profit margin of appox 20% you'd pay tax and S/S on that figure, normal accounting allows you to claim more and varied expenses but you must employ an accountant to handle and file returns, the other two issues to take into account are Social Security payments which are quite high,and IVA which has a low threshold in Portugal 10,000€ afraid to get realistic answers you need to speak to an accountant
 

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Discussion Starter · #8 ·
Depends on what you earn, how the company is set up and also which tax regime you work under, the Simplified Regime as an example if turnover is <150,000€ then varies slightly with trade, service allows a fixed profit margin of appox 20% you'd pay tax and S/S on that figure, normal accounting allows you to claim more and varied expenses but you must employ an accountant to handle and file returns, the other two issues to take into account are Social Security payments which are quite high,and IVA which has a low threshold in Portugal 10,000€ afraid to get realistic answers you need to speak to an accountant
Hi Canoeman, You have been a fantastic help thank you very much.

I have spoken to two accountants one in Malta and one in Portugal, hopefully they can instruct me of the best course of action, you have furnished me with some very helpful information, I just do not want to be stuck in a position where i will end up in a high tax bracket.

thank you very much and hope you have a nice evening

Kindest Regards

Owen
 

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Nor do any of us, why good solid accountancy advice is needed to make right choices, just when two or more countries are involved it's gets that bit more difficult:)
 
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