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Old Nov 21st 2017, 6:04 pm   #1
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Default Tax residency.

Is my assumption correct?

If in 2017 I was here less than 183 days then I do not need to file income tax for the year.
However should I sign a long term rental contract on 31 December 2017 then I would need to file tax for the whole of 2017 tax year in PT even though I only resided here for one day.
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Old Nov 21st 2017, 7:14 pm   #2
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Default Re: Tax residency.

Quote:
Originally Posted by Ukkram View Post
Is my assumption correct?

If in 2017 I was here less than 183 days then I do not need to file income tax for the year.
However should I sign a long term rental contract on 31 December 2017 then I would need to file tax for the whole of 2017 tax year in PT even though I only resided here for one day.
Hi Ukkram
I sent you a PM.
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Old Nov 21st 2017, 8:25 pm   #3
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Default Re: Tax residency.

The strange thing I read is that when you live in another country until the 1st of December and you ask your RNH as of that date, you will receive the RNH for the whole calendar year. But the country where you lived 11 months, will of course claim that you file a tax return for your worldwide income during these 11 months.

I think that is a very strange aspect in the RNH.
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Old Nov 22nd 2017, 12:50 pm   #4
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Default Re: Tax residency.

Quote:
Originally Posted by Ukkram View Post
Is my assumption correct?

If in 2017 I was here less than 183 days then I do not need to file income tax for the year.
However should I sign a long term rental contract on 31 December 2017 then I would need to file tax for the whole of 2017 tax year in PT even though I only resided here for one day.
Hello,
Not necessarily Ukkram. According with the Portuguese Tax Law, it would depend on the house you are renting and actually on the use you would make of it.
Hope it helps.
Best Regards,
David C.
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Old Nov 22nd 2017, 3:08 pm   #5
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Default Re: Tax residency.

Does tax residency begin on the day you enter the country, or when you are accepted for residency?

For example, if I entered on 1 December 2017, and attained residency in March 2018, would tax residency start in 2017 or 2018?
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Old Nov 22nd 2017, 5:55 pm   #6
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Default Re: Tax residency.

Quote:
Originally Posted by ricko View Post
Does tax residency begin on the day you enter the country, or when you are accepted for residency?

For example, if I entered on 1 December 2017, and attained residency in March 2018, would tax residency start in 2017 or 2018?
If you entered on 1 Dec 2017 you would not be considered for tax for 2017 as you have to be present here for the 183 days required for tax residency.

If your intention was to stay by a rental agreement for long term and you intend living in it yourself and not renting for your kids then you will be tax resident for 2017.

From what date will you pay tax, I don't know nor does my accountant. I had to submit my tax in July 2014 to get a tax clearance for emigration and pay the tax before I left.

One accountant told me that I will only be taxed in PT from the date of arrival here and another said it will be from the date of receiving residencia.

Googling tells me that I pay tax for the full year in PT if I lived here for 183 days or more.
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Old Nov 22nd 2017, 6:21 pm   #7
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Default Re: Tax residency.

I think some of this confusion arises because of the mixing up of criteria for different circumstances.

The 183 or more days rule is the absolute clearest - if you spend that amount of time here you are definitely tax resident in Portugal.

If you spend fewer than 183 days here, you may still be considered tax resident. Under these circumstances it's a matter of applying "tie-breakers" to decide which country gets first claim on your income for tax purposes. These are enshrined in the dual taxation treaties. Obviously, you can't be not resident anywhere as far as the tax authorities are concerned, however you share your time between countries

If you're registered as tax resident in Portugal and you become non-resident, you should notify the tax authority within 30 days.
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Old Nov 22nd 2017, 6:41 pm   #8
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Default Re: Tax residency.

Yes. You have to get a "international tax residency" certificate from AT and send it to your precious IRS and they will close your books and you can wave them Goodbye.

This does not answer the question of do you pay tax for the full year or from the date you arrived or the date you got residencia.
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Old Nov 22nd 2017, 11:59 pm   #9
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Default Re: Tax residency.

According to Blevins Franks:

Quote:
As Portugal splits the year for residency purposes, you could be recognised as a tax resident from the day you arrive in Portugal with the intention of staying permanently.
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Old Nov 23rd 2017, 12:35 am   #10
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Default Re: Tax residency.

It's probably the sort of question that needs to be researched in Portuguese, with any translation carefully checked.

http://info.portaldasfinancas.gov.pt...grantes_EN.pdf appears to say slightly different things to the original Portuguese version, accessible from within the document.

You will be considered as “resident“ on Portuguese territory provided that:

Quote:
Haja nele permanecido mais de 183 dias, seguidos
ou interpolados, em qualquer período de 12 meses
com início ou fim no ano em causa.

Tendo permanecido por menos tempo, aí disponha,
num qualquer dia do período referido no ponto
anterior, de habitação em condições que façam
supor intenção atual de a manter e ocupar como
residência habitual.

Após a verificação de qualquer um dos critérios
estabelecidos no n.º 1 do artigo 16.º do Código do IRS,
terá de proceder, com a brevidade possível, � atualização
do seu registo da seguinte forma:
• Comunicar a sua residência em território português
junto de um serviço de finanças ou loja do cidadão; e
• Anular a nomeação do representante fiscal,
independentemente de qualquer outra alteração que
se mostre devida.
Link to Artigo 16.º of CIRS
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Old Nov 23rd 2017, 1:29 am   #11
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Default Re: Tax residency.

Quote:
Originally Posted by Pilou View Post
The strange thing I read is that when you live in another country until the 1st of December and you ask your RNH as of that date, you will receive the RNH for the whole calendar year. But the country where you lived 11 months, will of course claim that you file a tax return for your worldwide income during these 11 months.

I think that is a very strange aspect in the RNH.
Assuming you successfully apply for NHR within the relevant time limit following becoming resident, your NHR status will be backdated to the beginning of your residency, so will apply to your dealings with the Portuguese tax authorities for that part of the year in which you become resident even if you applied for NHR the following year (before 31st March). Why would you have dealings with the Portuguese tax authorities for any period before you become resident?

It just changes your status from ordinary resident to resident with NHR status. It doesn't change the relevant dates.
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Old Nov 23rd 2017, 8:47 am   #12
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Default Re: Tax residency.

Quote:
Originally Posted by RichardHenshall View Post
Assuming you successfully apply for NHR within the relevant time limit following becoming resident, your NHR status will be backdated to the beginning of your residency, so will apply to your dealings with the Portuguese tax authorities for that part of the year in which you become resident even if you applied for NHR the following year (before 31st March). Why would you have dealings with the Portuguese tax authorities for any period before you become resident?

It just changes your status from ordinary resident to resident with NHR status. It doesn't change the relevant dates.
Thanks!
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Old Nov 23rd 2017, 11:13 am   #13
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Default Re: Tax residency.

Quote:
For example, if I entered on 1 December 2017, and attained residency in March 2018, would tax residency start in 2017 or 2018?
Quote:
Assuming you successfully apply for NHR within the relevant time limit following becoming resident, your NHR status will be backdated to the beginning of your residency, so will apply to your dealings with the Portuguese tax authorities for that part of the year in which you become resident even if you applied for NHR the following year (before 31st March).
The second quote above says that you would become tax resident in 2018 for the example given in the first quote.

However, the following says the opposite:

Quote:
As Portugal splits the year for residency purposes, you could be recognised as a tax resident from the day you arrive in Portugal with the intention of staying permanently

I'm confused.
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Old Nov 23rd 2017, 11:31 am   #14
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Default Re: Tax residency.

What do you mean by attained residency? The process of registration of residency with your Câmara has little relevance to tax-residency.

In your example you have entered on 1 December 2017, presumably to stay. Why do you think that you aren't tax-resident from 1 December 2017? Because you haven't registered your residency?

An EU citizen who comes to Portugal to over-winter for 5 months is obliged to register their residency with their Câmara by the end of their 4th month but he/she will not acquire tax-residency at all (unless there are other factors applying) so long as they leave before 183 days/6 months after arrival.
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Old Nov 23rd 2017, 1:27 pm   #15
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Default Re: Tax residency.

The concept of the partial year residency was only introduced into the tax code fairly recently (effective 1st Jan 2015) and it is causing some headaches. There are calls for the tax code to be amended to clarify the matter.

I can see a lot of potential for unintentionally doing the wrong thing or for simply not being able to properly work out how things should be declared on the relevant tax returns. To the best of my memory, for example, there isn't anywhere on the tax return where you make it clear that the year was only partly spent in Portugal. And how do you decide, in the case of living here for 183 plus days but having a part year with tax paid as a resident of another country, whether to declare that income and the tax paid elsewhere to the PT authorities? And then there's the matter of the tax years being different in different countries.

You'd have thought this sort of stuff ought to be a doddle to answer for any Portuguese accountant offering services in completing tax returns (especially given the sheer number of Portuguese who have worked or are working abroad), but my own experience and comments of others on here certainly suggests that not all are giving the best advice with regard to the declaring of foreign income. Or even PT income, come to that.
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