½ûÂþÌìÌÃ

Menu
½ûÂþÌìÌÃ

Income tax on foreign source income outside Portugal

Post new topic

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 Contrato de arrendamento - NIF changesExpat taxesRecommendations for tax advisorsWho Talk to as US and German Citizen about Insurance and my taxation
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

Articles to help you in your expat project in Portugal

  • Dating in Portugal
    Dating in Portugal

    If it's true that dating in general can be tricky and present its challenges, even more so when we talk about ...

  • Phones and Internet in Portugal
    Phones and Internet in Portugal

    Whether or not you are a tech-savvy person, this is still quite an important part of everyday life – and it ...

  • The Portuguese lifestyle
    The Portuguese lifestyle

    Moving to a new country means you will be discovering a new culture and exploring different habits, as well as a ...

  • Work visas in Portugal
    Work visas in Portugal

    Portugal can be a great place to live in. This Southern European country is known for its great weather, ...

  • Renting options in Porto
    Renting options in Porto

    Over the past few years, rent prices in Porto have been soaring. As the city's popularity grows among ...

  • Student life in Lisbon
    Student life in Lisbon

    So, you have found the perfect university in Lisbon and got accepted. Congratulations! It's time to start ...

  • Weekdays vs Weekends in Lisbon
    Weekdays vs Weekends in Lisbon

    So you've taken the leap, left the comfort of the familiar and decided to relocate to one of Europe's most ...

  • Internships in Portugal
    Internships in Portugal

    Many students and young professionals dream of acquiring professional experience in a foreign country, which can ...

All of Portugal's guide articles