how do I become a resident
#106
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Joined: Jul 2016
Location: Alvaiázere, central Portugal
Posts: 591
Re: how do I become a resident
Orange blossom. I am glad this came up. I assume that you mean Portuguese resident, rather than EU citizen! Since you obtained residency during 2019 and never before, the following important issues apply:
Remember of course you need to submit tax returns to Portugal. We used a well regarded local solicitor, at a cost of 40 euros each. The submission window is 1 April to 31 June following the end of the previous tax year. You must obtain your login from the accountant - if accountants use other methods of login, then do act promptly and obtain your own.
You asked about the end or alteration of NHR. It is under consideration, and is not known whether any changes might apply to existing or only to new applicants. Almost everything is speculation, and there is no concrete information, which will, however, be in the public domain once the state budget is confirmed, which I believe will be on or about February 9. I have read that any changes will not be retrospective, and will apply from March 1. Whilst that, too, might be mere speculation, it makes sense for anybody considering NHR to do so as soon as possible since, as I have said, if one is eligible to apply for NHR, there are no costs or downsides for doing so.
- your first tax year of residency is 2019. Since you have this, you have started the clock ticking on NHR.
- If you wait until after 31 March 2020 you will not be eligible for NHR - unless you spend another 5 years as non-resident.
Remember of course you need to submit tax returns to Portugal. We used a well regarded local solicitor, at a cost of 40 euros each. The submission window is 1 April to 31 June following the end of the previous tax year. You must obtain your login from the accountant - if accountants use other methods of login, then do act promptly and obtain your own.
You asked about the end or alteration of NHR. It is under consideration, and is not known whether any changes might apply to existing or only to new applicants. Almost everything is speculation, and there is no concrete information, which will, however, be in the public domain once the state budget is confirmed, which I believe will be on or about February 9. I have read that any changes will not be retrospective, and will apply from March 1. Whilst that, too, might be mere speculation, it makes sense for anybody considering NHR to do so as soon as possible since, as I have said, if one is eligible to apply for NHR, there are no costs or downsides for doing so.
#107
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Joined: Mar 2013
Location: central Portugal
Posts: 4,111
Re: how do I become a resident
There is no such thing as an EU citizen as can be proved by looking up the definition of 'EU' & the word 'citizen'.
That might not at first sound important until you try to claim the same citizen's rights in a number of EU member states as many vary dramatically.
That might not at first sound important until you try to claim the same citizen's rights in a number of EU member states as many vary dramatically.
#108
Forum Regular
Joined: Jan 2020
Posts: 130
Re: how do I become a resident
Remember of course you need to submit tax returns to Portugal. We used a well regarded local solicitor, at a cost of 40 euros each. The submission window is 1 April to 31 June following the end of the previous tax year. You must obtain your login from the accountant - if accountants use other methods of login, then do act promptly and obtain your own.
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How would l go on if l initially get residency?
#109
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Joined: Jul 2009
Posts: 1,806
Re: how do I become a resident
If you become (tax-)resident in Portugal you will be expected to declare worldwide income & gains to Portugal. Whether or not you might previously have paid no tax somewhere else is largely irrelevant as Portugal will decide for itself if and how much tax you should pay in Portugal (using, if relevant, the appropriate DTA).
#110
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Joined: Mar 2013
Location: central Portugal
Posts: 4,111
Re: how do I become a resident
However, you might be able to register for NHR status which will give you a 10 year tax holiday on some but not all overseas income.
#111
Re: how do I become a resident
Orange blossom. I am glad this came up. I assume that you mean Portuguese resident, rather than EU citizen! Since you obtained residency during 2019 and never before, the following important issues apply:
- your first tax year of residency is 2019. Since you have this, you have started the clock ticking on NHR.
- If you wait until after 31 March 2020 you will not be eligible for NHR - unless you spend another 5 years as non-resident.
However, wouldn't the crucial points be whether a) the person, after registering residence with the Câmara, registered with Finanças as fiscally resident in Portugal and b) whether that is still the case at the time of applying for NHR?
The idea that someone can "bag" either residency rights or NHR status without actually being resident, except under somewhat different circumstances to those that appear to apply here, seems a bit odd to me.
I wonder how a Finanças officer would advise in this case? My suspicion would be not as above but that's just my own very inexpert assessment.
#112
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Joined: Jul 2016
Location: Alvaiázere, central Portugal
Posts: 591
Re: how do I become a resident
This is what Price Waterhouse said in 2014 - it is unlikely to be any different now:
To be considered as a tax resident, the individual should remain for more than 183 days in Portugal during the relevant fiscal year or have a dwelling in Portugal at 31 December of that year with the intention to hold it as his or her habitual residence.
From their well known and much referred to web page: Price Waterhouse
This raises a couple of interesting questions, though.
To be considered as a tax resident, the individual should remain for more than 183 days in Portugal during the relevant fiscal year or have a dwelling in Portugal at 31 December of that year with the intention to hold it as his or her habitual residence.
From their well known and much referred to web page: Price Waterhouse
This raises a couple of interesting questions, though.
- The word ‘considered’ may or may not indicate certainty. The sentence would be stronger if the word were not there, since ‘to be a tax resident’ is not necessarily the same as ‘to be considered as a tax resident’.
- The property question is that you own a property intended as a permanent home.....it does not say that it has to be occupied.
Last edited by Diddion; Jan 27th 2020 at 8:17 am.
#113
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Joined: Jul 2009
Posts: 1,806
Re: how do I become a resident
http://info.portaldasfinancas.gov.pt...ges/irs16.aspx would appear to confirm that things have changed since 2014!
Article 1 b) now applies on any day of the year, not just 31 December as previously. IMHO, that clause will only take effect when trying to trap someone in the Portuguese tax net that is otherwise appearing or attempting to avoid being treated as a (tax-)resident in Portugal, rather than being a clause which allows someone to claim (tax-)residency (to avail of NHR, for example).
It should also be remembered that another country may also be able to consider that someone is (tax-)resident there and it will be up to the tie-breaker clauses of the relevant DTA to determine which country's claim prevails.
1 - São residentes em território português as pessoas que, no ano a que respeitam os rendimentos:
a) Hajam nele permanecido mais de 183 dias, seguidos ou interpolados, em qualquer período de 12 meses com início ou fim no ano em causa;
b) Tendo permanecido por menos tempo, aí disponham, num qualquer dia do período referido na alínea anterior, de habitação em condições que façam supor intenção atual de a manter e ocupar como residência habitual;
c) Em 31 de dezembro, sejam tripulantes de navios ou aeronaves, desde que aqueles estejam ao serviço de entidades com residência, sede ou direção efetiva nesse território;
d) Desempenhem no estrangeiro funções ou comissões de carácter público, ao serviço do Estado Português.
a) Hajam nele permanecido mais de 183 dias, seguidos ou interpolados, em qualquer período de 12 meses com início ou fim no ano em causa;
b) Tendo permanecido por menos tempo, aí disponham, num qualquer dia do período referido na alínea anterior, de habitação em condições que façam supor intenção atual de a manter e ocupar como residência habitual;
c) Em 31 de dezembro, sejam tripulantes de navios ou aeronaves, desde que aqueles estejam ao serviço de entidades com residência, sede ou direção efetiva nesse território;
d) Desempenhem no estrangeiro funções ou comissões de carácter público, ao serviço do Estado Português.
It should also be remembered that another country may also be able to consider that someone is (tax-)resident there and it will be up to the tie-breaker clauses of the relevant DTA to determine which country's claim prevails.
#114
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Joined: Jul 2016
Location: Alvaiázere, central Portugal
Posts: 591
Re: how do I become a resident
Now that is interesting, Richard! Any idea when it was changed?
#115
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Joined: Jul 2009
Posts: 1,806
Re: how do I become a resident
Below the text on each page are links to previous versions of each section of the Code. It seems that you have to go back two steps to a version that was in effect until 31/12/2014.
#116
Re: how do I become a resident
http://info.portaldasfinancas.gov.pt...ges/irs16.aspx would appear to confirm that things have changed since 2014!
Article 1 b) now applies on any day of the year, not just 31 December as previously. IMHO, that clause will only take effect when trying to trap someone in the Portuguese tax net that is otherwise appearing or attempting to avoid being treated as a (tax-)resident in Portugal, rather than being a clause which allows someone to claim (tax-)residency (to avail of NHR, for example).
It should also be remembered that another country may also be able to consider that someone is (tax-)resident there and it will be up to the tie-breaker clauses of the relevant DTA to determine which country's claim prevails.
Article 1 b) now applies on any day of the year, not just 31 December as previously. IMHO, that clause will only take effect when trying to trap someone in the Portuguese tax net that is otherwise appearing or attempting to avoid being treated as a (tax-)resident in Portugal, rather than being a clause which allows someone to claim (tax-)residency (to avail of NHR, for example).
It should also be remembered that another country may also be able to consider that someone is (tax-)resident there and it will be up to the tie-breaker clauses of the relevant DTA to determine which country's claim prevails.
#117
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Joined: Jul 2016
Location: Alvaiázere, central Portugal
Posts: 591
Re: how do I become a resident
I think that if anyone wants to use regulatory loopholes, they really need to understand every relevant aspect of the regulations before doing so. From my point of view, if I were to be involved in that, I would hate to run the risk of being caught up in Portuguese investigations. From what I hear, appeals can take a long time and be extremely costly, even if successful.
#118
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Joined: Jun 2014
Location: York
Posts: 52
Re: how do I become a resident
Fine by me if i don't end up becoming tax resident this year. i wasn't in the country for the relevant number of days last year and won't now be this year. What I am hoping to avoid is that somehow the financas automatically assumes 183 days after someone declares they have been resident for 90 days that they are to become fiscally resident in Portugal. As regarrds tie breakers UK would clearly win. It's now a question of whether I should contact financas to make this clear or whether it is best to leave well alone.
#119
Re: how do I become a resident
Fine by me if i don't end up becoming tax resident this year. i wasn't in the country for the relevant number of days last year and won't now be this year. What I am hoping to avoid is that somehow the financas automatically assumes 183 days after someone declares they have been resident for 90 days that they are to become fiscally resident in Portugal. As regarrds tie breakers UK would clearly win. It's now a question of whether I should contact financas to make this clear or whether it is best to leave well alone.
#120
Re: how do I become a resident
Do you eat dictionary for breakfast every day? Any chance you give it a break?