Portugal foreign sourced freelance income taxed?

Tax and legal
1

Hello everyone,

I found this forum and lots of conversation about Portugal’s NHR scheme but most of the posts seem to turn into discussions about companies etc and go off subject of self employed / freelancers.

So my situation is this. I’m from the EU (for now) but have other eu passport option to fall back on. I have been a perpetual traveler for a long time, been to lots of countries, researched lots of options and I would not choose a country of residence purely for tax savings. I have lived in Bulgaria (probably not for me), also spent lots of time in Malta, Cyprus etc. So don’t need alternative advice. Although tblisi is an option, it would be cool to keep this right on subject.

I am in Portugal at the moment, I spend lots of time here but now covid 19 is rudely interrupting my lifestyle I have had time re evaluate. This is where I chose to stay due to the pandemic and out of all the places with favourable options Portugal is where I would choose to get residency too.

But I am so confused. As are most people I speak to. So someone with no foreign company, no proof of tax recently. No address for years, or any property in any other country etc etc. A true perpetual traveler. If I apply for NHR am I going to face questions that could screw me up? And would I realistically get accepted for the NHR scheme without any recent history of normal life? (My profession is on the list) Because registering yourself as a tax resident before applying for NHR to see if you get accepted seems like gambling to me. And I understand that foreign sourced freelance income would be seen as effectively earned in Portugal and taxed at 20%? so all the advice on other sites (even some reputable sites) about 0% on self employed foreign income is total bs? Plus social contributions are high? Even parting with 20% is not realistic? I’m not rich, I don’t need tax avoidance advice and I don’t mind contributing towards a country I would semi settle in. But hypothetically speaking (choose your own random figures for an example) what would a freelance professional expect to pay in total? And if I spent say 5 or 6 months a year in other countries, would this be seen as foreign earned income and zero % (all my clients are in other parts of Europe).

And if any of you are Portuguese specialising in this field, with reasonable fees, then it would be cool to chat.

1 Like
2

@Perpetual have you managed to figure this out? I’m in a similar boat.

3

Under NHR you need to use a tax-transparent company to avoid corporate tax and get the more advantageous personal income tax scheme. In that case tax rate (for certain “high value” professions) will be 20% + about €250 social security per month + some legal fees for payroll and company mgmt.

4

I agree that having to spend 12 months in a country that is not right for you is a high price to pay for tax advantages… However, there are quite a few countries that are happy to offer you a tax residency where your foreign income is not taxed at all if you only stay there for a short period of time every year. I think it’s 3 months in Panama. I read somewhere that it would be 1 day in Costa Rica, but I think that is not correct (probably only 1 to 3 months, though). 6 months is also common.

5

Dear Manu, can you help enlighten the euro 250 for social security? Is it a fix amount? I thought social security is based on 27% of your gross invoice for freelancer?