Tax on Foreign Sourced Income With NHR in Portugal

Issue description

Hey everyone,

I’m planning on moving to Portugal under the NHR visa. I’ve an EU passport, so that’s not a problem. I aso comply with the other requirements. My situation is:

I earn income from HK as a consultant, I’m a tax resident in Panama and as a result my income from HK is tax free (Panama does not tax foreign sourced income). Despite DTA between Panama and Portugal, will I have to pay tax on this income in Portugal?

Thanks so much, Laura

Steps tried (optional)

I have done endless research but cannot find out if I’ll need to pay tax, considering my income in untaxxed.

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I am not quite sure what you are looking to do.

If you remain a tax resident in Panama, then your Portugal NHR is irrelevant as your current tax arrangements would continue.

If you move your tax residency to Portugal, then again - Panama will become irrelevant, and you will pay tax either in HK at source or in Portugal under NHR.

Hi Tommy, Thanks for your response.

I plan on spending more than 183 days in Portugal per year, and so I will will become a tax resident of Portugal (and no longer a tax resident of Panama). When I read about the NHR, it says :
Foreign-sourced salaries are exempt from taxation in Portugal, provided said salaries are taxed at source as foreseen by the double taxation agreement in force between Portugal and the source jurisdiction.”

What I want to know is whether or not I will have to pay tax in Portugal on this HK income, if I am a tax resident under the NHR?

Hi Laura

I agree with Tommy, and you should probably get a good Portuguese tax accountant to assist. Hong Kong appears to be a blacklisted jurisdiction according to PT so the benefits of NHR may be limited for HKG sourced income. (Worst case it could become subject to a higher rates of local (PT) tax.)

Blacklisted jurisdictions for tax in PT

It’s possible there may be ways to mitigate above via an intermediate company in a whitelisted country, but expert advice is needed imo.

FYI I’m not a tax advisor so check above yourself
Hope this helps

Thanks Peter, ya I think a tax account consult is a must. My case is definitely a bit complex. Shortly, I won’t be receiving income from HK, but dividents from Australia. There is no DTA between Portugal and Australia so I think that may be problematic for me!!