m2m2012

I was reading this article:

https://www.expatica.com/pt/living/g...rtugal-105303/

"The self-employed have to pay monthly contributions at a rate of 25.4% of their declared income (if covered by the compulsory protection scheme alone) or 32% (if they opt for the broad protection scheme) of the pay scale chosen by them."

I'm trying to understand if I would need to pay into this system once I became a resident and tax resident of Portugal.

I would move to Portugal using an EU passport and my only income would be from rental properties located outside of the EU. I plan to join the Portugal NHR tax regime (non-habitual resident) which means zero tax on my foreign rental income. I don't plan to work in Portugal.

Rambling archer

So if you do not plan to work in Portugal why do you think anything to do with the Self-Employed has anything to do with you? You are not setting up as self-employed (autonomo) to conduct any sort of business? Your income - from outside Portugal - is from a passive source, rental from properties ... Do you run your properties as some sort of business (Management Firm perhaps?)?

m2m2012

No, I don't run the foreign rental properties in any sort or LLC or company. They are in my name and run by me.

Rambling archer

So you don't have any business responsibility in Portugal. You are not going to be "self-employed" in Pt, you will be non-employed, with demonstrable funds to support you while resident in PT from external sources.

m2m2012

Okay thanks. Is there any link between paying into the Social Security system and access to the healthcare system? Would someone "non-employed" not paying into Social Security have access to the government healthcare system?

liveaboard

Rambling Archer is correct; you won't have to pay social security.
Just bear in mind that there will be no pension either, so be sure you've made your own arrangements.

All legal residents of Portugal now have access to the Portuguese NHS, even if not paying.
You might have to pay income tax, depending on the particulars and the dual tax treaty between Portugal and the country where your rental property is located.
23% flat rate I beleive.

m2m2012

Thanks for your reply.

With regards to receiving a pension; what happens in cases where someone moves to Portugal in their 60s and starts paying into social security? Can you receive a pension if you've only been paying into the system for say 5 years?

Red Eric

Doesn't look like it to me.

You'd need a minimum of 12 years' voluntary contributions to get anything at all.

Social Security - Age Pension (in Portuguese)

TonyJ1

If you obtain the 'non habitual residency' status, you don't have to pay income tax on your rental income from abroad (there are some exceptions to this) for a period of 10 years

TonyJ1

Strictly speaking - you will be entitled to nothing. However, if you have contributed into some other systems with which Portugal has an agreement (Social Security), then all contributions will be taken into account

m2m2012

Okay. With 'non habitual residency' status do you pay capital-gains-tax on capital gains located outside of Portugal such as the sale of real-estate or precious metals?

TonyJ1

Capital gains on fixed property - no, provided the asset is not in the Portuguese black list. In respect of precious metals - I am not sure - would be something that I would have to investigate

m2m2012

Thanks for your reply. When someone becomes a tax resident of Portugal do they at some point need to declare their worldwide assets? Or is it only their worldwide income?

Moses2013

https://home.kpmg/xx/en/home/insights/2021/07/portugal-thinking-beyond-borders.html
A person's liability to Portuguese tax is determined by the residence status and the source of income received by the individual.

Portuguese residents are subject to tax on their worldwide income at progressive marginal tax rates and certain types of income are taxed at flat tax rates (between 10 and 28 percent), and non-residents are subject to Portuguese tax on their Portuguese-sourced income at the applicable rates (between 10 and 28 percent), depending on the type of income received. A double taxation treaty may provide a variation to these rules.
An individual will be regarded as resident in Portugal for tax purposes, in the year or part of the year, to which the income relates to, in case the individual:

• spends more than 183 days – continuously or not - in the country/jurisdiction within a 12-month period, or
• spent less than 183 days herein, they have, at any time of the referred 12-month period, accommodation available in the country/jurisdiction in conditions where it can be assumed that it is their intention to use it as a place of habitual residence or abode.

In case the above criteria are met, an individual will be regarded as resident since the first day of their presence in the country/jurisdiction until their departure.

There are, however, some situations foreseen where the tax residency status will still apply for the entire tax year.

If none of the above conditions are met, the person is considered to be a non-resident. Tax liability will occur only with regards to the individual’s Portuguese-sourced income (in case of employment income, Portuguese-sourced income would include compensation derived from activities performed in Portugal, as well as compensation paid by a Portuguese entity).

The special regime for non-habitual tax residents (valid for a 10 year period) will apply, provided that the individual:

• has not qualified as tax resident in Portugal in the previous 5 years
• qualifies as tax resident in Portugal under the domestic rules in each year of that 10-year period
• is registered as a non-habitual tax resident with the Portuguese tax authorities

An application must be filed up to 31 March of the year following the one in which the individual qualifies as a tax resident in Portugal.

Another special regime is also foreseen for “former tax residents” (for a period of 5 years). This regime applies to individuals who:

• have been deemed as tax residents in Portugal before 31 December 2015
• returned to Portugal in 2019 or 2020 and meet the criteria to qualify as tax residents herein under the applicable tax residency rules
• have not been deemed as resident in the previous 3 years
• have not applied for the non-habitual resident (NHR) tax status

This regime is supposed to be extended (it was granted a legislative authorization to prorogate the regime to arrivals until 2023), however, at the moment the related legislation was not published yet.

To benefit from the former residents’ tax regime, no formal application needs to be completed.

Under the regime of non-habitual tax residents, the individuals who qualify as tax residents may be subject to tax on Portuguese-sourced employment income at a special 20 percent rate provided that the related activity performed is duly recognized as a “high-value added” one; a tax exemption may apply to the foreign-sourced income received by the individual (if certain conditions are met, namely, if the referred income is subject to tax in its country/jurisdiction source or if it can be subject to tax according to the rules of the applicable DTT (even if it is not actually taxed), depending on the type of income).

TonyJ1

Taxpayers have to report income only, though if a taxpayer has banking accounts and / or investment accounts held abroad (eg stockbroker accounts), the details of the bank account (bank account number and Swift code) and details of the account of the financial institution should be reported. For other assets eg fixed property held abroad (if not earning income), is not subject to reporting - the income would be reportable, and so would the proceeds on sale (costs) be reportable on disposal. The same as with other investments - only have to report on disposal eg invesment in a private company abroad