wellinever

just tried to register at financas office as tax resident.
my actual residency was received in Dec 2020 so thought best to register with tax office before 6 months up.
So took residencia paper and sef doc along with passport.
Bloke said yes i can accept these, but it will mean that we MUST use the date of residencia in 2020, and that means that you will be liable for tax in portugal for all worldwide
income in 2020...!!!!
I had been advised by 2 accountant firms that I would be able to use my 2020 residencia to start Tax residency today...
The bloke at the Financas advised me to wait until I receive the Final residencia card with photo and biometrics, Then that will start on the date of issue and then I can apply for tax residencia in 2021 and not pay tax 2020, and will then have until end March 2022 to apply for NHR.

Red Eric

I wonder if your exceptionally helpful tax officer overlooked the fact that you were listed as tax resident in one of the 5 tax years prior to 2021 (which is the start tax year for NHR consideration under this scenario)?

wellinever

hi red
I think you know my history with P Financas,,,,ie was registered as a tax resident here between 2010 and Nov 2016, despite the fact that I had no property or income in Portugal, nor had residencia in Portugal after 2010......so yes despite that being completely wrong as far as P Taxman was concerned I could not change what they had written down...ie an address in Portugal which was and still is my old accountants shop !!!!
All taxes paid in Portugal when I left in 2010, and returned to UK.
So my main questioning of the new accountants was.....would I open up a can of worms if and when I registered for Tax residency again, as I had not filed any tax return in Portugal for the period 2010 and 2016 (lol....why would I I didnt live here nor owned anything in Portugal) , and had supplied new address in the UK in 2010 to my accountant, along with full Land registry details of property bought and price paid.
I was assured that the statute of limitation in Portugal is 4 years and therefore they would not be interested in anything before 2016.
Now I didnt get that far as there was zero point in starting tax residency in Dec 2020 and then paying tax in Portugal for earnings for whole year in the UK !!!
But I suppose the thing is that now if I dont get the new biometric residency card before 23rd June, when I will have been resident in Portugal for 183 days, will I then be forced to use the December 2020 date or get fined for not becoming tax resident after 183 days of residency. Unless of course I go back to UK before then (if you can, will I have been jabbed by then?? Just one question after another, none of the answers that I can possibly know)
I guess at least if what he says is correct, and even taking into account that they classed me as tax resident until Nov 2016 then any time after Nov 2021 puts me out of the 5 year rule, and would be before end of March 2022.

Red Eric

Indeed - you've posted about it before on here.

I think you may find that the tax year is the tax year - ie that counting 5 years from the exact date you were last registered as resident and applying for consideration after that might not suffice to get you successfully NHR registered. If the first year of NHR consideration is 2021, the last year of which you were considered tax resident during any part of it ought not to be any later than 2015 by my calculation.

I could be wrong, though.

wellinever

You are probably correct Red.
But i am fed up with it all.
Every accountant i pay for information gives me rubbish info.
Or gets me in the crap with taxman.
I have had enough.
Building was a project for me.
Never wanted to become resident but delays and covid made that necessary along with Brexit.
But think best for me is now to get back to uk get rid of house, pay the 28% tax as uk res.

Red Eric

Must have been quite a challenge doing all that from scratch.

You have my full admiration. And my sympathies on the accountant front. The one time I used one, I was also subsequently disappointed to find I'd been given duff gen and it had cost me money over a span of some years.

borisface

I'm not sure what your issue is other than not wanting to be tax resident in Portugal. Your residencia attests that you were tax resident in Portugal in December 2020. The general rule in PT is:
An individual is considered tax resident in Portugal if they meet any of the following tests: (i) they have spent over 183 days, consecutively or otherwise, in Portugal in any 12-month period starting or ending in the fiscal year concerned; or (ii) they have a home and there are circumstances suggesting the intention to keep it and use it as a habitual abode on any day of the period referred above.

You appear therefore to be caught by ii). No?

Loafing Along

Worthwhile asking Finanzas for a 5 year history , in theory should be negative returns, good precursor to NHR

wellinever

or (ii) they have a home and there are circumstances suggesting the intention to keep it and use it as a habitual abode on any day of the period referred above.

The house I have just built, whilst it received a habitation licence in November 2020, was not actually registered as a house (formerly a plot of land for building) at the Registro until 4th January, that was the earliest it could be done, and to date it still has no IMI attached to it in April 2021. So technically it was not a house in 2020.

riv

what does

(ii) they have a home and there are circumstances suggesting the intention to keep it and use it as a habitual abode on any day of the period referred above.

mean exactly ?

' use it as an habitual abode ' ?

I spend less than ( currently a lot less than ) six months a year in my Portuguese house. It is my 'habitual' abode when I am there.

borisface

I'm not sure that works. You've told the PT authorities that you were resident here for 3 months prior to December when you obtained your residencia which kinda suggests you had a home here and had the intention to use it as a habitual abode. But best of luck.

borisface

My understanding is that your habitual abode is where you live most of the time, in your case not Portugal.

Loafing Along

Yes in the traditional sense but the Portuguese tax legislation has a second definition which includes the concept of having a property available to live in
he is present in Portugal for more than 183 days, consecutive or otherwise, in any 12-month period starting or ending in the calendar year concerned; or
he is in Portugal for a shorter period, but he has on any day during the period mentioned in the previous subparagraph, an home under circumstances which imply his intention to keep and occupy such abode as his permanent residence; -"

wellinever

That is the usual catchall wording that Portugal is very good at....make everything so ambiguous that no one can really be decisive, hence so many lawyers and accountants all over the place. As my new accountant said...the tax system in Portugal is totally outdated and should be brought into the 21st Century (his words not mine), but its good for them of course.

In my case I had left Portugal at end of March and, i had returned to Portugal in September with the intention of getting all of this messy paperwork sorted out (like 12 month delayed Hab Lice (their fault not mine) and then Registering at Tax and Land registry), and going back to UK before end of year or shortly after in the new year,,,,,,but only to be thwarted again by officialdom and so realised that with the end of Brexit looming with the loss of EHIC, 90 day Schengen rules that I had no choice other than to apply for residency in order to stay legal and be covered by Portuguese Health service (you cannot get any sensible Health Insurance as a non Portuguese resident, other things like Medicare not available to over 70s, travel insurance frm Uk not possible because you are already out of the country) but then suddenly no planes ,so here I am stuck but at least I now have all documents except IMI valuation which is no big deal.....ironically the 2 main reasons for taking out residency, namely health cover with EHIC remaining valid and Schengen 90 day rule abolished until flights running again (now not until May) I need not have become resident at all....but then to be told that if I want to become tax resident in Portugal it had to revert back to 2020 (and the last 4 days of 2020) and that I would have the pleasure of paying tax to Portugal, for what???? It might be the way it is written, but its not morally correct, in my eyes, none of this was my fault, all of this was down to delays with the system.
And now the idiots in charge of this fiasco in Portugal have taken the foot off the gas and allowed the bureaucracy, which is terrible at the best of times, to go even slower, by extending all these deadlines, so now with no deadlines, so of course people will slow down even more.
Presumably thats why I have not had any acknowledgement to my application for exchanging DL, sent 3 weeks ago. Which I will now not proceed with in any case or the bit of paper that could now last all this year only permits you to drive in Portugal.
I can see me revoking residency as quickly as I can, now not being able to register for tax treatment on house sale (ie reinvest rollover relief n Portugal, cause not tax resident and my UK EHIC still valid, then no point in being classed as a resident, wont loose DL in UK, so can insure my car there, and can still drive in Portugal for 6 months in any year.