I am looking into this with tax advisors right now because the advice is all over the place. Based on the advice I’ve received so far, this is how I understand it – but I am looking for professional validation or correction:
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To obtain tax residency, we must enter into a 1-year lease or purchase real estate before 12/31. We are looking into cost-effective options here.
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Once we apply for tax residency, our world-wide wages are taxed in PT, irrespective of where earned. Other types of income are a mix, but wages are taxed (including US wages, irrespective of where we live). This was a surprise.
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Once we obtain NHR, our tax rates for various categories of earnings are capped and either low or exempt.
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However, irrespective of NHR, wages earned in US are “fully” taxed. This could be an issue for me for 2024.
a. If I qualify as a “high value occupation”, my wages would be taxed at a flat rate of 20%.
b. If I am not a “high value occupation”, my wages are taxed along PT’s progressive marginal rate scale (capping at 48% for wages over ~€78,500)
The upshot appears to be this:
If I qualify as high value AND we get NHR, then my US wages, together with our other earnings, will be taxed in PT at a max of 20%. This might be OK once the PT-US tax treaty is applied ( but I am awaiting professional help). If I DON’T qualify as high value, then I’m going to pay much more tax in PT, and only able to offset the US taxes to the extent of the US taxes – so I probably net pay much more in taxes.
Happy to hear what others are seeing and advice they are getting.