Tax residency in Portugal

Tax and legal
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66

Hi lads hope yous are well good to see there is others in the same situation as myself.

Any extra info i find over the coming weeks and months ill post onto here.

67

Hi all,

Just my 2 cents, Iā€™m not a lawyer and this is not legal advice.

  • If you want to sell assets (be that stocks, bonds, crypto etc.) and be taxed under the Portugese laws, you will have to have been a resident of Portugal during the tax year the disposal was made, while making sure not to be a tax resident elsewhere as well (to avoid potential double taxation). For this case that means having a long term residence in Portugal, which is your main residence, and spending 183 days a year in Portugal. (It might be possible to spend less under the NHR regime I believe, but letā€™s leave that aside). If you are planning to move from say Ireland to Portugal, you can tell the Irish tax man, I am leaving permanently and I will not be a resident here anymore. Then you come to Portugal and sell your crypto. And then you stick around for 183 days while enjoying your tax-free gains.

  • Important: some countries (for example the UK), have strict regulations on how many days you can come back to the country after you stop being resident. If you go over this limit, you are automatically classified as resident again, and then you will get rekt by both Portugese and your previous country tax authorities. Do not get rekt. Seek clear legal advice if this is what you are planning on doing. Also think if you will need to go back to the home country within the next x years during which they have you ā€˜on holdā€™. In the UK, if you come back within 5 years and become a resident, you will pay capital gains taxes on all the profits you made since you left.

  • Having Portugese residence isnā€™t necessarily linked to NHR. You can be a resident and not be registered under the NHR scheme. The NHR scheme is just an added bonus for new residents of Portugal that gives you preferential taxation for some types of income - mainly dividends and foreign sourced income. AFAIK it has nothing to do with crypto, since cryptocurrency is regulated outside of that, and that law is the same for all Portugese residents, even if they are not classified under as NHR residents. Currently the law says 0% capital gains on cryptocurrency disposal. This doesnā€™t include yield farming, defi and staking, as these are currently unregulated, so it could be anything.

  • Final point: if you trade crypto on a regular basis, you might get classified as a professional trader in Portugal, and then you will pay regular Portugese income taxes on your profits, not the 0% capital gains tax. The regular income tax is tiered, but goes to 40-50% easily. So again, donā€™t get rekt. If you trade small amount, I assume they wonā€™t care much, but if you have enough money in this to catch the attention of the taxman, they might look into this and tax you accordingly. But again, not advice.

Thatā€™s all from me, best of luck to you all, and may the gains gods smile upon you!

69

Iā€™m a German tax resident as well and am considering the same. Drop me a PM, might be good to have a chat.

70

I donā€™t know how accurate the info is in this article but it might give some people who arrive on this thread other interesting options.

71

Guys - Iā€™ve spoken to both a Tax lawyer in Portugal and one in Ireland. What I realised is that (from an Irish perspective) there is not one ruleā€¦as there are two types of residency that Revenue look at. But the 3 year clawback does not count as long as certain criteria are met according to the double taxation agreement. Basically, yes you can be wholly tax resident in Portugal, but itā€™s not simply as straight forward as move, open a bank account and become a PT tax resident. Anyone interested can dm me.

The long and the short of it is it doesnā€™t change my plansā€¦I just need to work within the system to legally avoid CGT in Ireland. Cheers

72

dear gabriel,

do you have any update on this?

73

Would love to get further info on this as myself and a friend will find ourselves in this situation very soon (this November) - very new to this platform though and canā€™t work out how to send a DM to you :laughing:

74

Hi Cliff,

This is so helpful, as I am also in the same situation and currently planning my exit of uk with crypto. Thankyou for the guidance, lets hope they dont change the regulations regarding crypto capital gains