Royalties from foregin income (US and Australia) under NHR benefits?

Tax and legal
1

Hi there,
I’m planning to move in Portugal and get the benefits of NHR program soon,

90% of my earnings are from selling music / audio and I do get paid royalties every month from US and Australia.

US ans AU are deducting Withholding Tax (15% & 30%) on all of these earnings,

Des under NHR program I’ll be exempt from paying tax in Portugal since tax has been paid and its foregin source of income ? or I’ll pay additional 20% under NHR in Portugal too?

2

There is a tax treaty between Portugal and both these countries. You cannot reclaim the witholding (well unless you are acting as an agent of a coprporation in the taxing country) but you get a tax credit in the country within which you pay tax that is offset against that same category of tax.

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3

Thanks for your reply,

So basically 0% tax for the income from AU and will pay additional 5% (20-15=5%) for the income from US ?

4

I dont know what rate of tax you pay in Portugal but you can deduct 15% and 30%. Do check though that Portugal accepts royalties as income ie check it is covered by the Treaty

If your income is taxed in Portugal, I cant see the reason for taking up residency as you could simply remain world non resident and save the 5% now and 20% when your NHR expires but that is another issue…

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