Hello!
I’ve been reading a lot and seems like the NHR is NOT what most people think so I need confirmation on my findings and what could be the most beneficial situation for me.
I’m currently living in Germany and working for a Canadian company (localized via Employer of Record, meaning that I’m officially employed in Germany and both of us pay all the German taxes). My plan is to move to Portugal soon with NHR. Please correct me if I’m wrong on any data below. My current situation:
Salary: 75k euros/year
Taxes (PIT + SS): around 40%
Company spends around 28% of my salary in taxes and EoR fees (so I have a cost of around 96k euros/year for them)
Moving to Portugal with NHR I have 2 options: keep working under an Employer of Record (now localized to Portugal) or renegotiating my contract to make it look like a contractor.
OPTION 1: As a localized employee via Employer of Record, paying Portuguese taxes:
Salary: 75k euros/year
Taxes (PIT + SS): 31% (20% NHR + 11% SS)
Company spends around 36% of my salary in taxes and EoR fees (so I have a cost of around 102k euros/year for them)
OPTION 2: As a contractor. Would remake my contract to include a temporary limit (1 or 2 years) to work on a specific project (not sure if this is enough to be considered contractor, please enlighten me)
Salary: 75k euros/year
Taxes (PIT + SS): around 30% (20% NHR over 75% of income + 21.4% SS over 70% of income)
No VAT charged, as it is for a Canadian company.
Company spends ZERO extra with me, meaning I can possibly renegotiate my salary by A LOT, plus not paying SS on 1st year.
Unlikely case: company gets charged 10% SS because of 100% dependency (which I heard that doesn’t happen to foreign companies).
To me seems like the contractor way is more beneficial by far for both me and the company. Also more flexible in case I want/need to find a new job in the future. It does include the risk of the Tax Authorities reviewing my contract to check if it falls under regular employment (then forcing me to switch to the Employer of Record way and maybe lowering my salary) or forcing a 10% SS pay from the company.
I would love suggestions and corrections to make the best choice here. If my data is correct, might also help someone else in a similar situation. Thank you!