Portugal High Valued Profession pays tax on foreign income?

Tax and legal 🏛
#1

Hi guys,

I live in Portugal as NHR and still failing to understand how to manage my taxes in the best way.
I’m a designer which is on the list of the high valued profession and i work with clients mostly outside the eu,
Should i be taxed for that?
Can an Estonian company or third party invoicing company help me pay less taxes?

Thanks

Yan

#2

Hi Yan,

based on what you are saying you may be eligile to fall under NHR value added taxation.
If you work as a sole entrepreneur you should issue invoices through the “recibo verde” regime.
It doesn’t matter where your clients are located. You’ll be taxated in Portugal if you do your activity there.

So in general you would be taxated for the professional incomes at 20% flat rate (other types of incomes have their own treatment).

If you work from Portugal and invoice your clients from Estonia the portuguese tax authority could claim the icome as produced in Portugal and tax it. So be very careful with that.

Please also bear in mind that professional incomes originated in Portugal also pay social security. So you will have to add the social security burden to the 20%.

Hope this helps

#3

Thanks for your replay,
Do you have any idea about a scenario that i get a salary from a company in Estonia, (No taxes paid in Estonia)?

#4

You should check the double taxation treaty between Portugal and Estonia but as a general rule, employment income is exempt in Portugal only if the income is effectively taxated in the sate of the source.
So in this case if Estonia does not tax, Portugal will. I think that Estonia applies a 20% withholding tax on employment income paid to non residents so no difference in effective tax rate. The difference could be the social security but I honestly don’t know how does it work in Estonia.

#5

Hey, Yan!

FYI: If all the work is done outside of Estonia and you are not an Estonian tax resident, then your salary will not be taxed in Estonia - this is if you work according to an employment contract and do not belong to the management. Therefore taxes will be due in Portugal.