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Income tax on foreign source income outside Portugal

yubayashi

Hello.

I have a question about Portugal income tax.

I am a holder of NHR status.

I receive all my salary from Japanese companies.

(I do not receive any remuneration or salary from Portuguese companies)


In this case, what will be the income tax?

My tax consultant has told me that I will be subject to income tax at a rate of no more than 20%.


Wouldn't income from sources outside Portugal be exempt from tax?

I would like to know if anyone has any information about this.

Many thanks.

See also

The tax system in Portugal NIF online for EU citizenTax Accountant - NHR°µÍø½ûÇø taxesContrato de arrendamento - NIF changes
donn25

I gather you wouldn't really recommend this tax consultant.

ctomac

Try having a look here:

I found it pretty useful for my own personal situation, helped me understand some things.

JohnnyPT

@yubayashi,


You are exempt from tax on income from abroad, as long as it is taxed in Japan (double treaty agreement):


(Select Japão, then open PDF, pag 12, in Japanese)


The NHR status has a special tax rate of 20% applicable to income from employment and self-employment ONLY if derived from "high value-added activities".

apma

Oh man, I went through something similar last year. Thought all my freelance income from outside Portugal would be chill under NHR, but then got hit with the news about the 20% tax rate on some types of income. My head was spinning trying to figure out what I'd actually owe.

Iarayan

If you're living in Portugal with NHR status, you've got a cool benefit where some money you make from abroad (like your salary from a Japanese company) could be taxed less. For instance, if you do a special kind of job that Portugal thinks is really important, they might tax you at a lower rate of 20% instead of more.


Also, the deal between Portugal and Japan is super important, as it says you won't be taxed twice on the same money. This means if you pay taxes in Japan, you won't pay them again in Portugal on the same income, or vice versa, depending on the specifics.


Use this , it will give you. clearer picture of your tax depending on your specifical situation.

chrisschubert21

Good Job Larayan!

TonyJ1

The NHR provides for exemption on interest, dividends, rental income, some types of royalties, rental income if the 'other' country may tax such income - if the income is from a country in the Portuguese black list, it is excluded, except if Portugal has a double tax treaty with such a country. It does not require effective charge in these cases.


In the case of salaries, it is tax free in Portugal, if the other country, effectively taxes such salaries, but only if it is in terms of the relevant double tax treaty. In case of remote work, only Portugal may tax such salaries - if salary is effectively taxed by Japan, it is done outside the rules of  the relevant double tax treaty, and the PT tax authority is absolutely entitled to tax such salaries, and does not have to give credit for tax incorrectly deducted - remedy is to recover such tax from the Japanese tax authority. Under ordinary rules, in practice, Portugal would give credit for the Japanese tax deducted - I am not sure it would do so under the NHR rules.


Japan may tax if the work is undertaken in Japan. If the taxpayer spends more than 183 days in Japan, then only Japan may tax such income (some additional rules, but for practical purposes, may be ignored) - only in this case does the zero rule come into play