Your Top 19 Questions Answered By Tax Experts (Living in Portugal)
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- Опубліковано 3 чер 2024
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Josh from ExpatsEverywhere sits down with experts from Fresh Portugal to discuss top questions about filing taxes in Portugal. See what questions our Patrons and supporters sent us.
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Chapters -
00:00 - Intro
00:13 - Tax residency Q1
01:49 - Tax residency Q2
03:27 - Tax liabilities with and without NHR Q1
04:28 - Tax liabilities with and without NHR Q2
06:57 - Tax liabilities with and without NHR Q3
07:47 - Double taxation treaty and/or who to pay first (U.S./home country or Portugal) Q1
08:52 - What is FBAR reporting for US tax filers?
09:49 - Business tax question for US business vs Portugal based business
10:53 - How are different income sources taxed?
15:12 - How are different income sources taxed? (ROTH IRA vs IRA)
16:51 - How are different income sources taxed? (Annuity Income)
17:31 - How are different income sources taxed? (Social Security payments)
17:54 - How are different income sources taxed? (Rental income)
19:16 - How are different income sources taxed? (Passive vs Active income)
20:29 - How are different income sources taxed? (Job location and FEIE)
23:08 - Tax efficiency tactics
25:20 - Difference in taxation based on citizenship and residency
26:02 - When do I start my tax reporting in Portugal?
27:03 - What's a fair price to pay for tax filing services?
28:16 - How to get my taxes filed and additional information
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Josh and Kalie left the US for a life abroad in 2009 and haven't looked back. They have lived in Spain, South Korea, Saudi Arabia, Singapore, and are currently in Portugal. Yes, they realize they only moved to countries starting with the letter "S" until they spoiled that streak with their move to Portugal. Follow ExpatsEverywhere as we aim to get information to you through expat interviews, city breakdowns, expat life, travel, vlogs, and more.
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I gotta check these people out. I’m an engineer thinking of doing consulting for American clients when moving to Portugal and this part of it is stressing me out the most.
Very informative. If I understood correctly, it means that my Social Security and Retirement Funds Income would both be taxed in Portugal on the sliding scale because I don't have the NHR. So I'd be paying a huge amount of tax which makes Portugal unaffordable for me.
That's my understanding as well, it may actually work out that my high value income might qualify under the new yet to be defined NHR and have a lower tax rate. But it depends on where your ss income and pension would fall on the sliding scale and if you are married.
Thanks for the great info!! Excellent resource!
Thanks Josh and Kalie for keeping up the great work!
I am unclear. Are these pension and or dividends income from abroad only taxed when they are brought to Portugal?
FreshPortugal - fee of 300 Euros to only file your taxes with Pension income - Damn, that's too excessive! This should not be hard to do.
Thanks for your video.
One question....
If your income is not taxable in foreign country (origin) do you have to pay tax on it in portugal ( having adress in portugal but not own the property and living there less than 183 days).
I don't understand the information about source of income and being 'hired in Portugal'. For the D8 visa, a specific requirement is to be remotely employed by a foreign company not in Portugal. Who should be taxing you in this situation (with or without NHR)?
Thank you!!
Great video (as usual). I’m forwarding as it’s SO important to have tax consultations BEFORE moving to portugal. Planing is so important BEFORE you become a tax resident.
Thanks, Veronica. We agree. That pre-work is pretty crucial. - Josh & Kalie
Super informative video. Thank you 🤍
Thank you 🙏 We appreciate the feedback! - Josh & Kalie
Just enough info to keep you up at night and scare the crap out of you.
@@gumanow 🤣 Yea. Ultimately, the best thing to do is just get your personal situation analyzed because general information in taxes can really leave you with too much confidence or not enough. 😬 - Josh
Great video! I do wish you'd gone into more detail on the Roth IRA. Most people when it comes to thinking of a distribution from a Roth are thinking that you are selling some or all of a stock and then withdrawing the cash the sell produced. But what if you have stocks in the Roth that generate dividends and normally those are being reinvested but you turn off the DRIP and let it accumulate as cash then withdraw the cash. Is the sell i.e. capitals gains, treated differently than dividend withdraws? It's my understanding that minus NHR that dividends are taxed at a flat 28%.
Hello everyone, After having the NHR and have changed the NIF to a Portuguese address at the end of 2023, can you pay taxes partially instead in Portugal?
Great video! I need to get a hold of one of these professionals to find out if VA disability is taxed in Portugal.
Thank you. Did you happen to use the link in the video description? - Josh & Kalie
I follow and subscribe to your channel for all things Portugal. I love your updates and suggestions on cities. Especially, "Would you ex-pat that?"
So I have a heavy heart to say this but this video rubbed me the wrong way. I've seen Fresh Portugal present several times on several youtube channels and their approach is one of Fear, Uncertainty, and Doubt, or FUD. I contracted with them to give me a consultation when NHR was announced to be ending, and it wasn't cheap, but later figured that no one really knew what was going to happen with it so I cancelled and Fresh refunded my money which was nice of them. I don't doubt that they are a reputable firm and their knowledge, it's just their approach. Yeah, I get it, some people have to be shocked into action.
Every time I watch them present I find myself losing sleep and questioning my own investment strategy and retirement.
I wished Josh would've interjected with some questions and counterpoints of his own.
Thanks for the comment. We think one of the main reasons that they're a "source" is because they do/have knowledge of American, British, and Portuguese taxes.
I'm not sure I would even know what to interject with in this format. I really have to rely on them and their expertise.
Regarding costs, for sure, they're not cheap. They're probably best for 6-figure income people that have complex tax situations.
Regarding FUD, around the time we filmed this and the other video with them, it was in the storm of the announcement of NHR ending so there was a lot of fear, uncertainty and doubt.
So, I think those are the reasons that this video and maybe other videos with FRESH came of that way. If you'd like other tax prep recommendations, Kalie keeps a list of ones that we get good feedback on and she can share that.
Thanks again for taking the time to write. - Josh
After receiving a citizenship from Portugal and then moving away, are its non-resident citizens required to pay taxes while living in another territory or country? Are taxes mainly territorial for citizens living away from Portugal?
I missed this i had a tax question. Let's say i retire to portugal and sell my primary home in the US after I've moved to Portugal. Let's say i live more that 183 days in Portugal. Will Portugal tax that home sale even though it was my primary home in the US?
Great information. We're in a different situation. My husband is US and Portuguese citizen with a Portuguese birth certificate, NIF, NISS and passport. I have applied for citizenship through marriage. We would like to move to Portugal from US in approximately a year and a half. Curious about the Regressar program and the tax implications for us.
Very helpful info! I appreciated all three interviewees.
Bottom line takeaway for me looking at a retirement with passive income that would almost entirely be classified as “pension” (social security + supplementary social security via retirement account) under Portugal’s tax laws is to assume all will be taxed, but foreign income tax credits and some possible exemptions will in theory protect against double taxation while also specifying what percentage of a distribution from a retirement account (like traditional IRA, Roth IRA, 401k, 403b) is growth versus contribution is important because only growth is taxed. How one figures out and reports what represents contribution versus growth in such a distribution for Portuguese taxation purposes is, however, unclear to me. I’d love some follow up and more guidance on that point.
You should be able to simply separate your contributions from the gains you’ve made. If I understood correctly, your contributions can be withdrawn tax free. However, if you take a distribution of your gain, 10% Portuguese tax.
Thanks Josh, it would have been helpful if you had read the questions as for the longer questions I could not read the whole question in the question box or the subtitle. A good video would be what to do with cash assets once in Portugal to reinvest those assets tax-free.
You're welcome. Sorry that I didn't read them. We found the video to be really long so we thought it might just work better for UA-cam if we put it in text and let people pause it if they needed. We've been talking more about financial stuff on our podcast. Have you listened to any of those episodes? - Josh
Self accessment of annuities; so does that mean I can call it investment income? I read your only taxed 15% of the amount, assuming 85% was your principle.
This is REALLY, REALLY helpful. Great questions by the viewers and good answers.
I have been out of touch for a bit, but what's the current fate of the NHR?
Thank you!
Current fate is that there's been a restructuring and there's rumors of an NHR 2.0 however we believe more will become clearer in March after the elections. - Josh & Kalie
It is incorrect what he says. I think he’s even afraid do say it. If you have a high value activity with NHR being a freelancer, invoicing abroad from the renenue website with “recibos verdes” your effective IRS rate will be 0% (as long as you’re invoicing a country with a non double taxation agreement with Portugal (most of the world is). You have to pay social security though… around 15%. The 20% flat fee is if your source of income is within Portugal. A 20% flat fee would be ridiculous for Americans as most America pays that or less for IRS (I think. Maybe California is different). Now, this is finishing. This is the last year to enroll in the NHR (unless the new government revogues it) anyway it has changed and most of the professions were removed and it is not so easy as before to enroll.
To all my fellow American citizens: if you move to Portugal 🇵🇹 and either have double nationality ( US and Portugal) or eventually get portuguese citizenship, consider giving up your US citizenship: Uncle Sam still requires you to file taxes in the US as long as you retain your US citizenship, in addition to you filing taxes in Portugal. Uncle Sam still overwatches your every purchase and/or income in a foreign country to get some $$$ out of it if applicable. 😒
The real unknown is how Portugal's tax system treats US and Canadian pensions due to the overhaul of the tax system towards residents from other countries which was introduced in 2024. Both in the US and Canada, expat pensioners must pay withholding tax on their pensions according to which country they are in, so in case of Portugal, for instance Canadian pensioners living there will have to pay 15% tax. It is very unsettled that nobody in Portugal can say with full clarity how Portuguese tax regime interprets the fact that 15% has been already paid and that under the Treaty to avoid double taxation, North American pensioners should not be tax again on the same pension, that is to say, Portuguese tax regime should acknowledge this first 15% already paid. So far, there is no evidence or clear statement from anyone from within the accounting specialists community in Portugal to firmly state that Portugal tax should be what is left to be taxed about 15%. I think that without being clear about it, Portugal is playing a smart but ambiguous game which can cool off my potential pensioners from planning to settle there.
However, Finanças has given a hard time to people to become tax residents even before the NHR was abolished. Why is that? If a gym membership for a year establishes your intent to live in Portugal? I know of a couple whose NHR was rejected even though they have residency visas because they don’t have a res card yet( can’t get an appointment with AIMA).
It’s the rules. You’ve have to have had your AIMA appointment already before applying online. I went through the same thing but once I changed my address to my Portugal address, it went right through.
Do you have information regarding Canadians working (earning from Canadian clients) in Portugal and Canadians retiring in Portugal and what their taxes might look like? I know Canada and Portugal have a treaty as well but I don’t know what that entails really. (Husband is Portuguese but would be retiring with a Canadian pension)
Can anyone recommend a good tax agent in portugal for us citizens
Kalie is keeping a list of recommended ones. You can email her at info@expatseverywhere.com if you'd like. - Josh
So NHR is still good to go in 2024? So happy to hear that might actually consider my move there now! Thanks for sharing this valuable information.
If you are retired living on a pension without the NHR 10% pension tax you will fall in a regular tax rates which is very expensive. There are many retirees from other EU countries living in Portugal. It will be prohibitively expensive for a retiree to live in Portugal. Many will move out of Portugal. Having paid taxes all of your life and suddenly having to pay high taxes for a pension is a penalty. Even paying 10% tax on a pension is way too much.
I don't work and I don't pay taxes 😊
Good for you, share with us how you live without an income.
Welfare and living at or below poverty level.
Forget about it, if you fart in Portugal, it would seem that too would be a taxable event. D7 application flushed down the toilet.
This is the problem with 48% top rate, just insane with no incentives to bring in investment or establish new business and/or real estate initiatives without a host of taxation issues and ongoing disputes. This is why young people are fleeing Portugal and Italy in droves, as the unemployment rate is massive and starting a business is prohibitively expensive with onerous regulations, too, if you bring in a staff. These Socialist countries had better learn now that any intelligent investor (or young person) will not tolerate such a greedy, entrenched bureaucracy. And the future is clear--either adapt more advantageous tax incentives for investors and businessmen, or simply fade away and perish. Italy, for instance, is slated to go from 60 million to 40 million people over the next 25 years...what an absolute tragedy!
Please leave the socialist country, nobody is forbidding you to go. We don't need your kind of trumpist religious ideas and, specially, your interference in our internal affairs. S. Diego seems good, why did you left your capitalist friendly country and did come suffer here? We like to fade away without the absolute tragedy that are your ideas and lies.
Portugal will go most likely to 3 - 4 million inhabitants by the mid 2030's. The good thing is, that with a decreasing real Portuguese state, parallel economies become more and more feasible, enhanced by technological solutions. There is a large subset of very intelligent/wealthy but extremely annoyed with the government people in Portugal who are taking things into their hands in certain areas.
How is it possible to be so arrogant?!!!
How can you criticize the way of life of other countries and suggest that they follow your fantastic and "altruistic" investment ideas if you do not have nationality, you are not an elected official and certainly do not even speak any of the languages of those countries? How about first fixing your own country that is experiencing huge crises of gun crime, opioid overdoses, political extremism, millions of citizens without any medical coverage, and that has a huge humanitarian crisis on its borders, created by the policies of your rulers, that provoked civil wars, military interventions and the famous war on drugs? And you call these countries socialist? Because they have regulations that you don't like? Do you even know what socialism is and what EU countries are? Italy a socialist country? You, an intelligent investor?🤣😂🤣😂
so basically... come to Portugal if you are already have money or have some inheritance heading your way. Don't come if you need to earn money.
The key would be to live on as little income as possible to not move up the tax brackets.
I don't understand people!!! You want good services, good roads, good hospitals, but then "oh gosh, I don't want to pay taxes!". From where do you think the money for that comes from, trees? You want to come live in Portugal you can't be privileged in relation to the 10 million Portuguese. Specially when you have bigger revenues. Be reasonable, please.
I dont agree...portuguese have great salaries and should pay taxes for the expats, since we gonna benefit from RE speculation and impossible prices to buy or rent a house... that is pushing youngsters for new immigration wave (at the moment, all time high).
@@miro6017 investment you mean RE speculation to trade right after to other right foreigners? For this "investment", you mean driving house prices Impossible for locals and imigrants? You mean making a new wave of portuguese emigration because that can afford a house now? In your sentences is obvious the respect you have for the country and the portuguese and thats the people we are attracting here... with tax benefits..
@@miro6017 I was wondering if your comment deserves a response, given the high level of ignorance, privilege, and flat lies you put into it.
Firstly, there are not 30% of Portuguese people being paid 700 euros by taxpayers, which immediately shows the level of ignorance about the state of this country, or the desire to spread lies.
Second, the vast majority of the investment you speak of is in AirB&B, or companies where there are no employment contracts, where wages are the minimum possible, and where unionization is not encouraged. We don't need this type of investment, or these types of people.
Third, we don't need immigrants, sorry, expacts, (because only those with dark skin are immigrants, or the Portuguese who are working in other countries), whose high idea they have of investment is to go to private hospitals or put the children in private schools. Just because they feel superior and different. But after they complain if they have to pay taxes, and obey regulations.
As for us having the same level as Romania, I don't care at all what's going on in that country, and I don't feel inferior, if what you write is true. If you think it's that bad here, the borders are open. Look, Luxembourg have nice wages.
We, Portuguese, are famous about being welcoming. Don't take that for wanting people coming here and tell us how to live. You will be in deep trouble if you try.
@@miro6017 30% of portuguese live with 700 euros payed by the taxpayers?!!! 🤣😂🤣😂In what parallel universe?
I understand your anger but there's only 7500 Americans but 220000 Brazilians, 44000 British plus a large number of European foreigners plus many Portuguese people buying homes and apartments for AL's. These are the reasons for the soaring RE prices.
This is not good time to come Portugal. Theirs all services are lazy and taxs are high then the opportunity. They just need money without given good services. If you want to make life hell welcome to Portugal