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Apply for and Going Through the NHR process

Apply for and Going Through the NHR process

Old Oct 14th 2023, 12:10 am
  #16  
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Default Re: Apply for and Going Through the NHR process

Originally Posted by ErnestB
Logically the upside for the Portuguese looking to buy a property is that removing the NHR scheme should in time, help hold and or reduce house prices and therein rents too (the whole point of the recent protests)

Thanks
Ernest
Very unlikely house price will drop much short term in next 5y. Maybe long term price will start reducing by a bit.
As for rents, its very unlikely they will change, as PT is very popular tourist destination. Unless rent cap is introduced, like in Berlin.
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Old Oct 14th 2023, 6:44 am
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Default Re: Apply for and Going Through the NHR process

Originally Posted by ErnestB
It looks like a mute point now anyway from what Shanorme was saying. If indeed you have to "apply and be accepted" before the 1st of January 2024

Then there is no time as that is only a month and a half away, and I have not started the process and even if I did tomorrow I could not imagine the finance to get it done so fast.
There are only 2 things which might make it moot, both on you.

The first is whether you are, or have been within the past 5 years, registered with the tax authority as resident (ie given a PT address as your fiscal address as opposed to appointing someone as your representative). If you have online access to your Finances account, you can check what address you are registered as living at via that.

The other is simply whether you have things organised sufficiently to get here and get yourself issued a registration of residence for EU citizens at your local town hall prior to Dec 31st, which is still 2 and a half months away. That process is simple and quick.

Then you would have (under draft budget proposals) until 31st March next year to do the NHR request, which, by all accounts, is another straightforward and fairly speedy online process.
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Old Oct 14th 2023, 9:27 am
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Default Re: Apply for and Going Through the NHR process

Originally Posted by RichardHenshall
But ​​​​ErnestB has admitted that the address with which his NIF is associated is that of his friend, in Portugal. Unless his friend is acting as his fiscal representative he may have difficulty in proving that he hasn't been tax-resident during the preceding 5 years.
There are multiple aspects to tax residency. He can prove quite easily that his primary residence is not Portugal. He can prove his salary is not paid in Portugal and he can easily prove time spent out of Portugal.
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Old Oct 14th 2023, 11:04 am
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Default Re: Apply for and Going Through the NHR process

Originally Posted by Shanorme
There are multiple aspects to tax residency. He can prove quite easily that his primary residence is not Portugal. He can prove his salary is not paid in Portugal and he can easily prove time spent out of Portugal.
Not sure its that easy. I well remember having left PT years ago, when I had been a tax resident. My accountant paid all taxes due in PT, sent her deeds of house purchase in UK to prove reinvestment, assumed all was well. 7 years later returned to PT and as I had changed addresses in UK in the meantime went to local Financas to give them a change of address (had all UK docs with me).
Just a bit surprised when he opened up my Fiscal page and told me ...Your address here is .............in Portugal !!! It has been since 2010.
I looked and it was my accountants ` office address`....I explained that she must not have changed it to the address on the deed I sent to her to prove I was not tax resident (nor resident) of PT, owned no property in PT.......result, not interested in anything I said, other than only way for you is to get a tax return from HMRC for all years since 2010. Basically I could not, and so could not have NHR..............well I probably could have but deemed it not of real significance tio me at that time.
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Old Oct 15th 2023, 1:30 pm
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Default Re: Apply for and Going Through the NHR process

Hi Everyone


Thanks again for your input and thanks too to Red Eric for the tip (I really appreciate everyone's input)

I do have an online login to the PT finance system, I will dig this out and login.

I think the key point will be to show "in actuality" I am not and have never been a "tax resident" in Portugal (basically, never spent enough consecutive days here in any given tax year to be considered eligible to be a tax resident).

Plus I have a full-time job in the UK, live and work in the UK, own a house in the UK, and pay taxes in the UK on my UK job (all of which I can evidence for the last 5 years or more),

Logically it should be obvious to Portuguese finance, (even if my address on the finance system for ‘correspondence’ is Portugal), together with the above evidence that I am not and never have been a ‘tax resident’ in Portugal.

For example, I have been to the finance office before, (regarding paying my land tax), and they have informed me, all my Portuguese taxes are up to date, and I have nothing to pay (after selling my land).

Now, if I were a ‘tax resident’ in Portugal, then as with any other ‘tax resident in Portugal’ I would have to pay tax on my “worldwide income”. This would then mean (even if there was no tax at the end of the day to actually pay in Portugal due to the double taxation agreement with the UK), I would still have to complete a Portuguese tax return (every year). The fact I have been to see the finance several times over the years related to my land tax, and the fact they have never requested I complete an income tax return or posted me any forms requesting I complete an income tax return is a very strong indication they do not consider me tax resident in Portugal. In any event I simply would not qualify as I spend only a couple of weeks here once per hear (like any other tourist).

Again thanks everyone for your help and input
ErnestB



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Old Oct 15th 2023, 1:51 pm
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Default Re: Apply for and Going Through the NHR process

Unless you are now sure of your situation you can request a `certidao` from the AT in Lisbon, confirming your Tax situation in PT.
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Old Oct 15th 2023, 4:34 pm
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Default Re: Apply for and Going Through the NHR process

Thanks for the advice wellinever will do
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Old Oct 16th 2023, 6:28 am
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Default Re: Apply for and Going Through the NHR process

Hi Euro.Flag
I honestly appreciate your input (along with everyone else), but when you say

If your NIF is register at Financas with PT address, then you are PT tax "resident".

With the greatest of respect, you are wrong,

Tax residency status is far more involved than simply giving an address for correspondence. If that were the case then a Portuguese person giving a German address for example (of a friend in Germany) would by your logic not be tax resident in Portugal. Think about it, for a moment. Being tax resident or not and any country (apart from US citizens) is very tightly tied to the "number of days you spend per year in the country in question or do not spend in the country in question" This is the biggest determining factor of whether or not you can be considered tax resident in a given jurisdiction or not. (different countries have different time scales). Of course, I may be asked to prove that I live and work in the UK all my adult life (which is easy).

Thanks
Ernest
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Old Oct 16th 2023, 9:51 am
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Default Re: Apply for and Going Through the NHR process

Originally Posted by ErnestB
Hi Euro.Flag
I honestly appreciate your input (along with everyone else), but when you say

If your NIF is register at Financas with PT address, then you are PT tax "resident".

With the greatest of respect, you are wrong,

Tax residency status is far more involved than simply giving an address for correspondence. If that were the case then a Portuguese person giving a German address for example (of a friend in Germany) would by your logic not be tax resident in Portugal. Think about it, for a moment. Being tax resident or not and any country (apart from US citizens) is very tightly tied to the "number of days you spend per year in the country in question or do not spend in the country in question" This is the biggest determining factor of whether or not you can be considered tax resident in a given jurisdiction or not. (different countries have different time scales). Of course, I may be asked to prove that I live and work in the UK all my adult life (which is easy).

Thanks
Ernest
Nope, I am not wrong. Without sounding too harsh, you're trying to make your own interpretation of tax rules.
You can only register NIF to PT address if you're PT resident. And Financas would ask for official proof before registering PT address.
If you change address to German address, then you're not PT resident, official proof is again required. Same rules apply for UK resident moving out of UK.
If you're register as PT resident, you can try proving that you were out of country, but at same time failing to do tax returns will complicate process. Good accountant will be required.

Anyway, you can check your tax status on web portal. You have not answered questions from others post if your friend is your tax rep or not.

Last edited by EU.flag; Oct 16th 2023 at 9:54 am.
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Old Oct 16th 2023, 1:54 pm
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Default Re: Apply for and Going Through the NHR process

Originally Posted by EU.flag
Nope, I am not wrong. Without sounding too harsh, you're trying to make your own interpretation of tax rules.
You can only register NIF to PT address if you're PT resident. And Financas would ask for official proof before registering PT address.[snip]
Forgive the partial quote but on this part alone, it hasn't always been the case.

As with several other administrative processes, it was perfectly possible to go through this in recent times without official proof of residence in the form of a residence permit or registration certificate, and only latterly that things have been tightened up to include that documentation being a requirement.
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Old Oct 16th 2023, 5:10 pm
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Default Re: Apply for and Going Through the NHR process

This is part of a conversation which took place some while ago on the subject of being registered as resident with Finances. The poster was actually a tax resident some long time ago but had left Portugal without updating their address with Finances, which left it ticking away as "registered as resident in Portuguese territory" forever since. That same circumstance will apply to anybody who has registered themselves as resident with the AT, even if they only did it so they could use a friend's address for mail.

If you follow that thread through (and do a flick through other posts by the same poster), you will see that it is not necessarily the most straightforward matter to resolve, however much one thinks it ought to be blindingly obvious to AT that one has been tax resident elsewhere.
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Old Oct 17th 2023, 12:44 pm
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Default Re: Apply for and Going Through the NHR process

Hi Everyone, thanks for the updates, thanks too Red Eric for the link

I can see the issue with the conversation in the link posted by link Eric above This is part of a conversation which took place some while ago

The person in the issue says the following

Thanks again. Yes, I know this - all happened because I never told them when I left Portugal back in 1993

So from this short statement, we can deduce two things (or at least make a strong assumption)

a) The person "was living in Portugal before in before 1993" (as he left in 1993)
b) He was considered a "tax resident" already (before 1993), as he was likely living and working while in Portugal

Again a and b above are my assumptions, but reasonable ones based on what was said in the post. The problem is he/she forgot to tell the Portuguese finance they left the country and were no longer living in Portugal but taking up residence/work elsewhere.

This is very different from my situation, as I have never lived or worked in Portugal and the Portuguese finance department has therefore never asked me to complete an income tax return. The only tax form I had to fill out In Portugal was in relation to the purchase and sale of the land I brought/sold whilst living in the UK (this was related to sale tax on the land, a small yearly land tax whilst I own the land, and any potential capital gain then the land was sold). Again all of this while living and working as a foreign national in a foreign country, and therefore not tax resident in Portugal.

Thanks again everyone
ErnestB


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Old Oct 17th 2023, 1:30 pm
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Default Re: Apply for and Going Through the NHR process

The difference between your past histories will be immaterial, as far as I can tell.

You can see, from the notification from the AT which that poster very helpfully provided, that it is a standard response with a number of check boxes to mark which is the appropriate reason being given. In this case, it is purely and simply "registered on their tax file as resident in Portuguese territory", which (at least in the first instance) renders all other considerations redundant. As you haven't yet been able to clarify what's on your tax record with regard to your fiscal address, and working on the assumption, from what you've said so far, that you didn't formally appoint a fiscal representative, my guess would be that you have been marked as resident in PT since the time you gave Finances your friend's address.

Should that be the case (and you can tell if it is by logging in to the portal, then following this sequence : Todos os Serviços > Documentos e Certidões > Pedir Certidão > choose “Domicílio Fiscal” > Confirmar > Obter.

NB - I put Domicilio Fiscal in bold because there is another option (residencia fiscal) which is not to be confused with this as it is only for use in another very specific circumstance)

then my firm belief is that you would get the same response.

That's not to say it couldn't be corrected, as you can tell from the advice given on that thread. But the AT record is what they will go on first when they assess any request and you'd have to appeal that if you couldn't get it corrected before making the NHR application.

I'm not a pro, advisor or expert, though so this is just reasonably informed opinion.
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Old Oct 18th 2023, 11:06 am
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Default Re: Apply for and Going Through the NHR process

Hello Red Eric

Thanks very much for the detailed instructions (very helpful)

I did what you suggested and it showed the following (I have removed my NIF number my friend's NIF number and my friend's full address from the screenshot for security)

Thanks for your assistance


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Old Oct 18th 2023, 11:28 am
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Default Re: Apply for and Going Through the NHR process

Excellent!

That means that you did appoint your friend as your fiscal rep. and that you're logged as not resident in PT, so as long as that has been the case for the past 5 years or more, there will be no obstacle to being granted NHR from that perspective.
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