Tax queries in Portugal for an expat?

I’m no tax expert, but if you move and live in another EU country, then you will have to pay their tax instead of the UKs.

Thanks Gina and Ray.

Maybe I should start a thread on "countries you can escape to and avoid tax" then pick the best sounding one!

ta

An ever reducing list these days!

You’ll do better looking at Asia than the EU, USA or Canada.

Portugal, like a few other third world EU countries, is under immense pressure to improve on tax revenue. Whereas at one point they used to almost ignore foreigners and simply view them as tourists, they now view them as a rich (or easy) source of tax revenue. The thing is, as the foreigners see this and come under pressure to declare income/property values, they leave the country and often (not always) head back to their country of Citizenship.

If you do move to Portugal, and take up residency, then you can for sure remove your UK tax liabilities. All you will be doing is transferring your tax liability to a different EU state revenue system. You are not limited to any number of days in the UK as you are an EU citizen paying your taxes in the EU state you reside in.
For example. I am employed by a Portuguese company (ROVworld Lda). If I were to work in the UK (subcontracting to a UK company) I simply pay taxes on my salary as paid each month in Portugal. My salary is nowhere near what a company might pay ROVworld by way of services supplied but the full invoice value would be run through our business accounts. That is where profit will be generated and corporation tax will be liable eventually.
These days UK (B2B within the EU) companies will want to see your EU registration and employers liability insurance before they will take you on an offshore subcontractor B2B basis. No Tax (VAT) is chargeable between EU companies in different states as long as you provide your company tax/vat number on the invoice.

If you employ yourself (fixed monthly salary) under your own Portuguese incorporated company you will need to pay income National insurance, tax on your income.
Your company will be required to pay Company NI contribution for its ’employee’ and corporation tax on profits.
In effect as a ‘one man band’ limited company (with no expenses/running costs) you can write off (to the state – and the financial system is in a state in Portugal!) more than 40% of your income going down that route!
That figure can be reduced by way of valid business expenses/purchases. Company Car, Computer system/gadgets, fuel, training courses, medicals, business trips, mobile phones.. (for example a business trip to Canada is on the cards for us soon). Our company will pay for the air fares, hire car, hotel, meals etc. Pretty much the whole shebang will be charged to our company and thus reduce overall profit for this tax year. You can soak up a lot of daily costs as a business expense under the Portuguese system.

Whilst tax revenue is a necessary part of any country tax payers expect something in return. There is very little evidence of that in Portugal.

The above is part of the reason we are in the process of leaving and moving to Canada. I’m not for a moment suggesting that Canada is a tax haven, but of we are obliged to pay taxes (an increasing reality these days) then we might as well pay into a system that is stable and gives you something in return for your tax dollar. Something you’ll certainly not get in Portugal.

I still feel Asia is your best chance of a few tax free years.
In the near future I’m guessing the next Ex-Pat tax haven will be Myanmar! However as life moves on, one day you will realise that you are only ever a visitor, living on tourist or spousal residents visa’s and always at the mercy of the immigration authorities and laws in that country as to whether they allow you to stay or not and what you can actually own in your name.

For example in Thailand you cannot own land as a Foreigner. You can register a Thai company that can own land, but that’s another can of worms.
That’s why most guys Thai wives own (on legal documents) the land and house they live in, all paid for out of offshore income. Split up, marriage over, and the land/property is all hers under Thai law. You, as a foreigner own nothing. You can own a Condo/Apartment that is in a block on land managed by a Thai company.
Things may have shifted a little since we lived there (2003) so I’m open to correction on that as there may be newer Visa’s around.

Where will you feel most secure, by way of human rights, right to reside?
In the short term, as a youngster, it won’t matter too much.. so get out there and have fun! In the longer term you may need to review your requirements.
In many countries within Asia you’ll never have the right under law to reside there with the same life long rights as a citizen.
Living in the EU, as an EU citizen, you cannot be refused entry or ejected.
(Note on EI right to abode: Possibly one state could try and throw you out if you pissed them off locally, but you’ll still have the right to reside anywhere else in the EU.)
The same of course applies to Canada or the USA. Note I said ‘Citizen‘ not ‘Permanent Resident‘.