NHR Rules
#1
Just Joined
Thread Starter
Joined: Jun 2022
Posts: 2
NHR Rules
Hi all,
We are a couple working fully remote as a manufacturer representative, based in the UK, but our job requires frequent international travel to visit customers premises in adition to home office duties.
We own a house in Portugal and recently have been considering spending more time there versus moving up the ladder in the UK. This would facilitate the choice of Airports and expenses across both countries.
The NHR scheme in portugal seems like a great option as it would allow us to continue to regularly visit Portugal without the 183 day limit - so that in practice we could continue to be tax residents in both countries, while we test the waters. Tax wise it is clear we would be paying tax in the UK for so long as we are residents here - but we would be exempt in Portugal.
In regards to National insurance, it is not so clear anymore. We and our employer would be paying the standard rates in the UK, as long as we are residents here. We would also be liable for seguranca social (the portuguese National insurance) in Portugal - but what liabilities would this bring to our employer in the UK, in regards to the portugese seguranca social, if any? I ask, because the rates there are higher than in the UK and this would be a cause of conflict, if it were to raise higher or aditional payments from our employer.
Also, given the hipotetical possibility that we would renounce our residence in the UK and become tax resident solely on portugal, how would we calculate the ammount our employer would pay for seguranca social? In fact - I'm not sure on what the rules are to be paid by a foreign employer
Has anyone had any experience on this or can refer to some source of information we could consult on this matter?
Many Thanks!
We are a couple working fully remote as a manufacturer representative, based in the UK, but our job requires frequent international travel to visit customers premises in adition to home office duties.
We own a house in Portugal and recently have been considering spending more time there versus moving up the ladder in the UK. This would facilitate the choice of Airports and expenses across both countries.
The NHR scheme in portugal seems like a great option as it would allow us to continue to regularly visit Portugal without the 183 day limit - so that in practice we could continue to be tax residents in both countries, while we test the waters. Tax wise it is clear we would be paying tax in the UK for so long as we are residents here - but we would be exempt in Portugal.
In regards to National insurance, it is not so clear anymore. We and our employer would be paying the standard rates in the UK, as long as we are residents here. We would also be liable for seguranca social (the portuguese National insurance) in Portugal - but what liabilities would this bring to our employer in the UK, in regards to the portugese seguranca social, if any? I ask, because the rates there are higher than in the UK and this would be a cause of conflict, if it were to raise higher or aditional payments from our employer.
Also, given the hipotetical possibility that we would renounce our residence in the UK and become tax resident solely on portugal, how would we calculate the ammount our employer would pay for seguranca social? In fact - I'm not sure on what the rules are to be paid by a foreign employer
Has anyone had any experience on this or can refer to some source of information we could consult on this matter?
Many Thanks!
#2
BE Forum Addict
Joined: Mar 2008
Posts: 1,683
Re: NHR Rules
You appear to have the wrong idea about NHR ,which is Tax status
NHR is only available to actual residents and Tax residents of PT.
And if not a PT resident, then Schengen 90 day rule applies to Brits.
So you must become a PT resident before you can apply for NHR.
NHR is only available to actual residents and Tax residents of PT.
And if not a PT resident, then Schengen 90 day rule applies to Brits.
So you must become a PT resident before you can apply for NHR.
#4
BE Enthusiast
Joined: May 2011
Posts: 805
Re: NHR Rules
Can someone state what is the sequence of events with N H R ?
Does one first become Resident ( D7 Visa ) with no reference whatever to NHR, and then, having acquired residence, apply for NHR as a completely separate thing ?
Or must mention be made of desiring NHR when applying for Residence in the first place ?
Does one first become Resident ( D7 Visa ) with no reference whatever to NHR, and then, having acquired residence, apply for NHR as a completely separate thing ?
Or must mention be made of desiring NHR when applying for Residence in the first place ?
#5
Forum Regular
Joined: Jan 2022
Posts: 87
Re: NHR Rules
Can someone state what is the sequence of events with N H R ?
Does one first become Resident ( D7 Visa ) with no reference whatever to NHR, and then, having acquired residence, apply for NHR as a completely separate thing ? - YES
Or must mention be made of desiring NHR when applying for Residence in the first place ?
Does one first become Resident ( D7 Visa ) with no reference whatever to NHR, and then, having acquired residence, apply for NHR as a completely separate thing ? - YES
Or must mention be made of desiring NHR when applying for Residence in the first place ?
NHR must be applied for by 31st March of the year following that in which you were granted residency e.g. if you had your meeting with SEF and approved this year you would have to apply by 31st March 2023.
#6
Forum Regular
Joined: Apr 2017
Location: Greater Lisbon
Posts: 263
Re: NHR Rules
NHR is a consequence of becoming PT tax resident, as a matter of fact it is not a substitute for the visa requirement for stays exceeding 90 days.
If the OP wishes to benefit from NHR, they should first obtain the relevant visa, then tax residence, then apply for NHR, which would hopefully be granted.
Once NHR has been obtained (or, for the purpose of a simulation - assuming that NHR has been obtained), then all other eventualities regarding tax and social security payments could be considered, ideally with the help of an experienced accountant.
#7
Just Joined
Thread Starter
Joined: Jun 2022
Posts: 2
Re: NHR Rules
We hold the relevant EU citizenship wich would grant acess to Portugal. This is not an issue.
Where the issue arrises is that from the moment I become tax resident (NHR or not) I will be liable for social security contributions and technically so would my company in the UK.
Of course, after Brexit, there is nothing stopping one holding residence in both UK and PT, in which case double taxation agreements apply. But these don't cover social security and potential implications for the company as part of us becoming residents in another country.
I can't seem to find any guidance on this matter. Even if we were to become contractors, EU rules state that having one single client can be classified as employment with potential liability to the company later on.
Where the issue arrises is that from the moment I become tax resident (NHR or not) I will be liable for social security contributions and technically so would my company in the UK.
Of course, after Brexit, there is nothing stopping one holding residence in both UK and PT, in which case double taxation agreements apply. But these don't cover social security and potential implications for the company as part of us becoming residents in another country.
I can't seem to find any guidance on this matter. Even if we were to become contractors, EU rules state that having one single client can be classified as employment with potential liability to the company later on.
#8
BE Enthusiast
Joined: Aug 2009
Location: Wales/Ribatejo
Posts: 574
Re: NHR Rules
"NHR must be applied for by 31st March of the year following that in which you were granted residency e.g. if you had your meeting with SEF and approved this year you would have to apply by 31st March 2023."
Could you clarify this a little for me?
I have residency status(2019),and have my certificate of residence . I have not (as with most others)had my SEF meeting.
I havn't applied for NHR so can I still apply even though it isn't in the time frame(i.e March 2020) because this meeting hasn't taken place and i havn't received my digital permanent residency card.?
NSG666 is offline
Could you clarify this a little for me?
I have residency status(2019),and have my certificate of residence . I have not (as with most others)had my SEF meeting.
I havn't applied for NHR so can I still apply even though it isn't in the time frame(i.e March 2020) because this meeting hasn't taken place and i havn't received my digital permanent residency card.?
NSG666 is offline
#9
Forum Regular
Joined: Jan 2022
Posts: 87
Re: NHR Rules
"NHR must be applied for by 31st March of the year following that in which you were granted residency e.g. if you had your meeting with SEF and approved this year you would have to apply by 31st March 2023."
Could you clarify this a little for me?
I have residency status(2019),and have my certificate of residence . I have not (as with most others)had my SEF meeting.
I havn't applied for NHR so can I still apply even though it isn't in the time frame(i.e March 2020) because this meeting hasn't taken place and i havn't received my digital permanent residency card.?
NSG666 is offline
Could you clarify this a little for me?
I have residency status(2019),and have my certificate of residence . I have not (as with most others)had my SEF meeting.
I havn't applied for NHR so can I still apply even though it isn't in the time frame(i.e March 2020) because this meeting hasn't taken place and i havn't received my digital permanent residency card.?
NSG666 is offline
My reply was regarding the current post Brexit situation where most/many from UK need to apply to become resident using the visa process. Assuming that you are granted a visa that will allow you to move to PT and exceed the usual 90 days while awaiting your interview with SEF (at the moment these seem to be geting booked for you c.4months after the visa start date but at the opposite end of the country!). Following your meeting with SEF then if successful you will be issued with temporary residency and can then apply for NHR.
I've not taken a great deal of notice but get the impression that there were some allowances made for those applying pre-Brexit and delays due to covid but I don't really understand what your situation is let alone be able to advise on it.
NSG666 was online but will now be going off-line.......
#10
BE Enthusiast
Joined: Nov 2017
Posts: 866
Re: NHR Rules
"NHR must be applied for by 31st March of the year following that in which you were granted residency e.g. if you had your meeting with SEF and approved this year you would have to apply by 31st March 2023."
Could you clarify this a little for me?
I have residency status(2019),and have my certificate of residence . I have not (as with most others)had my SEF meeting.
I havn't applied for NHR so can I still apply even though it isn't in the time frame(i.e March 2020) because this meeting hasn't taken place and i havn't received my digital permanent residency card.?
NSG666 is offline
Could you clarify this a little for me?
I have residency status(2019),and have my certificate of residence . I have not (as with most others)had my SEF meeting.
I havn't applied for NHR so can I still apply even though it isn't in the time frame(i.e March 2020) because this meeting hasn't taken place and i havn't received my digital permanent residency card.?
NSG666 is offline
NHR relates to tax residency which is normally concurrent with Residency so that once one has Residency (and has not previously been resident in PT during the 5 years prior), one expects to pay tax in that country of residency and under the reciprocal arrangements between UK and Portugal, Portugal allows some incomes to be taxed lower or not at all, than normal PT residents. All one had to do is to go into the Financas Website client area and mark in the year of the start of your Residency ... not when you get your CARD, and not when you get your Permanent Residency. Since you have missed the usual limit date of the March following your residency acceptance it may be more complicated and a visit to the Financas Office might be a better idea, and perhaps they will allow you to claim from your Residency date but only allow tax reductions from now, and you will have missed 3 years reductions but can continue for the rest of the 10 years - for another 7 years.
Note that applicants for Residency since the Withdrawal Agreement finished, and indeed from other countries not in the EU, now have to start the whole process from their current country of origin via the PT consulate, then come to PT, then get an appointment with SEF to get their Residency approved ... not like we did under the WA, rolling up to the local Town Hall with a couple of documents and a friendly chat having already benefited from a couple of months in PT to get established!
Hope this helps?
#12
Forum Regular
Joined: Apr 2017
Location: Greater Lisbon
Posts: 263
Re: NHR Rules
We hold the relevant EU citizenship wich would grant acess to Portugal. This is not an issue.
Where the issue arrises is that from the moment I become tax resident (NHR or not) I will be liable for social security contributions and technically so would my company in the UK.
Of course, after Brexit, there is nothing stopping one holding residence in both UK and PT, in which case double taxation agreements apply. But these don't cover social security and potential implications for the company as part of us becoming residents in another country.
I can't seem to find any guidance on this matter. Even if we were to become contractors, EU rules state that having one single client can be classified as employment with potential liability to the company later on.
Where the issue arrises is that from the moment I become tax resident (NHR or not) I will be liable for social security contributions and technically so would my company in the UK.
Of course, after Brexit, there is nothing stopping one holding residence in both UK and PT, in which case double taxation agreements apply. But these don't cover social security and potential implications for the company as part of us becoming residents in another country.
I can't seem to find any guidance on this matter. Even if we were to become contractors, EU rules state that having one single client can be classified as employment with potential liability to the company later on.
a) if you register as a self-employed in PT, there are no social security contributions in the first 12 months
b) if as a self-employed you receive more than 80(50)% of your income from a single source (within PT or elsewhere), then that source is liable for 10(7)% ss contributions on top of your freelancer ss contributions
c) pre-brexit there could not have been concurrent payment of ss contributions in two eu countries, payments were in one country only, with few exceptions
d) whether now your uk company could be asked to pay twice ss contributions in the uk and in PT is a question that you need to refer to the relevant tax/ss departments in both countries, no forum could provide an answer to such a complicated matter...
e) wild guess - perhaps you could be a posted worker for 2 yrs and pay ni in the uk only, then register as self-employed in PT and benefit from another year of zero ss contributions in PT, but, again, refer to d)