Hi Josh, I was contemplating D7 visa all along and of course it is the easiest and least financial impacting pathway to long term residency in Portugal. While on the surface it looks great, a very careful review into one’s specific income situation needs to be done before jumping into the D7. I did a lot of researching on the Tax implication under D7, and here below is what I found, and I may be wrong because most of the info is from the YT videos listening to Tax talk etc. 1. By default under a D7 visa, like it or not you are a Tax resident of Portugal. No getting out of it. 2. For taxable income calculation under D7 they consider Global income from all sources. 3. For those who are retirees, their SS income will be taxed, along with Pensions and any other passive, dividend, cap gains etc. 4. I am sure there are many retirees who have their 401k and other investments in mutual funds / stocks etc and that income also joins the pool of taxable income. 5. For those that are a little older than retirement age when they draw their RMD (required Minimum distribution) from the 401k, IRS in US considers it as a Taxable income. So, anyone in that situation (Over age 72) will get hit with that income also as Taxable income. 6. There are a lot of Professional career retirees that easily fall in a much higher income from SS alone to the tune of $65K gross as a couple + income from other savings. My gut feel is that this category of people are easily in the AGI (Adjusted Gross income) of $80K on an average. 7. When you look at the US tax tables, after exemptions etc, your net tax will be around 15-18% of your Gross in that range of AGI. 8. Now Portugal Tax rates for say $80K (70K Euro) is about 40% that puts your Tax payable at 28K Euro. This is significant. 9. You may argue that Portugal and US have a Dual Taxation agreement and you can get the refund of Taxes paid in Portugal. There is an important Caveat on this Dual Taxation rule called the “TIE BREAKER” clause that determines if Portugal has a right to impose their tax rates and collect if desired. Not sure if this is specific to UK and Portugal or Portugal and any country. See at approx. 8:50 time mark in the video below. ruclips.net/video/-QSI68f7G8U/видео.html 10. After going through the inner finer details, I think the D7 is a good option for the people who are in the lower AGI on their Tax form, and those that are a little wealthier will get hit hard. 11. I did look at the NHR option, there again they tax your pension, SS, cap gains and as you age when other incomes like RMD etc., come into the picture in your later life your tax liability will only go up. I am now very skeptical about the D7 or the NHR options though they look very attractive on the surface. One of the options I would consider is splitting time between Schengen Europe or Non- Schengen countries using the 90/180 day visa rule and not be a Tax entity of any country other than US. There is no easy way out of Taxes, and at the end of the day Every one is after your TAX MONEY. Can you please do a video on this subject and throw different scenarios of income in retirement at say $ 30K, $60K, and $80K and project the tax liabilities with the Tax experts in a vlog. Thanks!
Hey, I can tell you this much, we don't want to create many more videos about taxes. 😁 That's for sure. Our best bit of advice is to speak to several tax specialist before moving and know your liabilities. Everyone's situation is different from remote workers to retirees. Nothing is truly black and white. We're learning that now. SEF and the visas are separate from Finanças and NHR so it's not exactly far to say anything certain about D7, D2 or even GV because those are not considered when talking about NHR. - Josh
I think you got this right!- I kept my business in the US while getting an unlimited EU residence permit in Germany. Some people say: "Italy is the new Portugal"...Seems that expats pay now less taxes there than in PT.
Excellent information and suggestions. If you come across the 30, 60 and 80K income scenarios of have any explanation for those categories please post or let me know. Based on this, it appears to me that Portugal is not a good option for US citizens who want to pay less taxes over long periods of time. Thank you.
Yes!! No doubt to what Cookmaster is stating above…I have a massive Distribution worksheet to assist us in minimizing our US taxes on 401K (not to even mention So-So or the impacts of RMDs) across retirement yrs. My understanding of the US reciprocal tax agmt is that it was designed to PREVENT the very double taxation that Augusto is describing. He does not cover anything regarding 401Ks, just loosely ‘Pensions’. A lot of people (& a lot of $$) will make a u-turn from the Portugal path if there is even a whiff of dbl taxation…is this why everyone has been saying ‘Portugal is dead?’ I would be super interested to hear more clearly described data re:401K income & how Portugal is insuring folks are not taxed twice = )
Capital gains should not be taxed in Portugal under the NHR program. This is one is an important topic. Americans under the nhr regime are supposed to pay 28% capital gains on the sale of us stocks. Your accountant may believe that you as a US person should be subject to the 28% taxes that applies to residents of other countries who have nhr status and another accountant thinks you should not pay this tax. There was a recent court ruling that said that Portugal can’t tax capital gains because the United States has citizenship based taxation and does tax their citizens capital gains. It is noted under the “savings clause” in the treaty. Portugal does not have the right to tax capital gains tax based on the wording of the nhr legislation. This was a court ruling and supposedly not binding but your accountant who prepares your taxes can take this direction in your Portuguese tax return. You shouldn’t have to pay this! I found this out because I was surprised that capital gains were going to be taxed despite the United States already taxing capital gains, but passive income such as dividends, interest and rental income isn’t (the Portuguese argument that it is already being taxed in the USA). Contradiction, right? Unfortunately, the accountant is not very specific in this video. He is very vague. Remember, you as a United States citizen you already pay capital gains taxes, vs a British person leaving the UK to live in Portugal is being exempt from his home country , so he/she pays capital gains tax in Portugal.
Some things to take into consideration: Some of the social security income may not be taxed in the US, for example if you earn under the minimum threshold. There is also a distinction on the rules for public pensions and private pensions. IRAs, 401Ks and Roth IRAs from what I understand, are considered private pensions.
I think a clarification needs to be added...if your paying US taxes on your pension (which most if not all US citizen's will be) it will be much higher than 10% and thus negating the 10% Portuguese tax on pension's because the tax treaty states that basically the higher of the 2 is paid. For example, if my effective tax rate in the US is 18% on all income including pensions, then you will pay zero in Portuguese taxes because its already taxed at a higher rate than 10%. If for example, your country of citizenship does not tax you on your pension then the 10% Portuguese tax would apply.
The tax treaty between the U.S. and Portugal used to exempt government pensions from both countries. That is the current treaty posted by the US government. When did that change and where is the official treaty making the change available?
Hi Josh, I think I am lost among all the things I need to learn. I just arrived to Porto; I have online businesses, and am overwhelmed by the amount of information that you need to know on how to do taxes here, if NHR is the best option, or IRS or IRC, still don't have a residence and would like to know if opening activity here is the way to go, or even studying a course under article 92. I can't find clear information online at all, I've spent days looking for information about taxes and residency!. I even went to the CNAIM and they recommended to talk to an accountant. I am still paying taxes in the US and I don't know when to stop activities there and start here. I saw you interviewed several accountants, who would you recommend to talk to? It would be even better if they are in Porto, where I am living now. Thank you!
Thanks for continuing to make such great content! I’m impressed by Taxes for Expats. I also recall a superb discussion you had with Stephen Boush. I know it’s not your role to advise what CPA to seek advice from but would love some direction if you have it about their strengths and weaknesses (if possible). Thanks again!
Thanks, Seamus. We appreciate your kind comment. Honestly, we would use either. Both have expat tax experience and straightforward portals. Price-wise they're similar too depending on how complex your tax situation is of course. Our advice would be to email them or set up a consultation after tax season (unless you need someone ASAP) so you can see who will serve you best. Hope that helps! - Josh & Kalie
Given the double taxation the big question is there an international tax credit on the US side for Portugal taxes. I had heard once there is. This all could be a major disincentive in moving to Portugal. Also Tax on capital gains from Stock accounts I believe
@@mrsiz218 Definitely and after 10 years NHR ends and Portugal tax is 48% for over 80k income. On top of that you always will have to pay US tax. They (EU?) is making it impossible and really discouraging making it out of reach. Fine I don’t need these high taxes to move to a poorer country than the US and lower my standard of living! unless I’m living off grid and paid less than 20k for a plot of land.
@trave764 AGREE! 100%! If you’re right about the 10% then we would still make the move. 10% is livable. I can do that. Thank you for taking the time to reach out! Means a lot to me!❤️❤️
The 10% not too bad assuming 40k retirement income of which 30k taxable at 10% fine only 3k. US tax with deductions maybe 2k fine living large ~3k a month. After 10'years 45% taxable on 40k plus US taxes puts you at 20k taxes, 20k yearly income or $1666 monthly, big difference enough to survive presumably depending on housing situation, other assets, savings, but not living large, brought down to Portuguese standards of living. Over the long term 20-30 years Portugal may be more expensive or about equal cost to US living
Is the 10% tax on the entire amount? And does it subtract what you already paid to the US. An example. Get 60K pension and pay 8K in federal taxes in the US, will I be charged 6K (10%) on the 60K in Portugal and need to pay that for a total of 14K?
Is income earned from RUclips AdSense taxed under the NHR regime? RUclips considers this royalties, but I'm guessing Portugal would tax it as earned income at 20%?
Well, this video has been very enlightening. I was planning to retire in Portugal but having my Social Security taxed in the U.S. and in Portugal as well, eliminates Portugal as a retirement destination for me. That's a shame.
Sorry to hear that, Chuck. Try to connect with a tax professional to know what your tax burden will more accurately be if Portugal is a dream of yours. - Josh & Kalie
Thanks for this! But if I’m hearing this right? We may not be making the move after all! 48%?! Yeah no just no. And hubby will NEVER go for that! BUT we will happily visit and often! 💔💔
You're welcome. It's 48% in the highest bracket and on earns over that threshold. Check out this link Table 2.5 portugalglobal.pt/EN/InvestInPortugal/fiscalsystem/Paginas/PersonalIncomeTaxIRS.aspx And again, get in the NHR scheme and you don't have to worry about this until after 10 years. At that point, you can always move. 😅 - Josh & Kalie
Thanks for sharing! I am interested to know how you are handling your income from RUclips. Did you guys register as a business/self-employed in Portugal and what do taxes look like for that? I talked to an accountant in Portugal and he highly discouraged me from having earned income from online businesses if we move to Portugal as we would be taxed in the progressive tax rate since "creator, freelance, writer" are not in the list that is eligible for the 20% tax rate.... If you guys could share, that would be great.
Hi, we haven't gone through the tax process in Portugal yet because we became residents in 2021. We will file next year and can make a video on that. Our RUclips channel is registered in the US and we have no fiscal ties to Portugal with ExpatsEverywhere LLC. - Josh & Kalie
@@ExpatsEverywhere Thanks for replying. I would love to see a video about that once you guys go through the process. Not to be a party pooper, but so is my business- registered in the US and no ties to Portugal, but according to the accountant, any income earned abroad (i.e. US), even passive income from ads, while a tax resident of Portugal is taxed at the progressive rates...which start at EUR ~4,000 so pretty low... it seems that the NHR regime is really geared to retirement income alone... hoping to figure this out, so we can decide if we should move.
@@ExpatsEverywhere So much conflicting information, that is why I will be interested to know how it goes next year when you guys actually file for taxes. Please share then...
Good questions. If you do your taxes correctly, you shouldn't have to pay both if let's say you take up residency in Portugal and spend the majority of your time there.
Hello Josh and Kalie, Thanks for always sharing vital information. Is it possible for you to share how in details to register for the nhr on the tax portal as I have been trying and do not understand the tabs that correspond to registering for the NHR . Thanks in advance.
Hey, thank you. Sorry about the late reply. We're wading through this whole NHR thing. We're not the ones to rely on when it comes to registering because we had a lot of technical issues that we need a few services to help us sort out. - Josh & Kalie
Thank you gor this great video. I am an israeli software engineer. Lately I got my Portuguese citizenship. I have a US LLC company registered in Wyoming. The conpany offers online services worldwide (US and portugal are not between the company's clients). I am trying to understand how can I get money out of the company with 0%? Is it possible with the NHR? How should I be paid in portugal? As employee in the company with monthly salary? By devidents? Will I have to live in portugal 6 months per year, every year? Thanks
and you do work from Portugal? have you heard about Pernament Establishment? if you work from Portugal and stay there more than 183 days and you are a tax resident there.. and you didn't registered here as self-employed or employee or you manage this US LCC... you are a tax evader ;)
Wow, thank you SO much for this super helpful video. I am a Dutch full-time artist currently residing in the UK. My partner and I are moving to Portugal next year and I'm hoping I will be eligible for the NHR scheme as it looks like artists are on the list of high value professions.
Good info. Under NHR tax regime if I have online businesses such as selling products on Amazon or Etsy or on other marketplaces I would be taxed 20%, am I correct? In addition to that, I have to pay social security tax of 10%? As a foreigner selling online in the US my income subject to 30% tax. How's the double tax treaty between Portugal and the US handle in this situation?
@@FreeToBe_Me unfortunately not true. The Roth is a US tax-advantaged vehicle and has no parallel, or mention, in the tax treaty between the two countries (Portugal has no obligation to honor US tax structures, unless in the treaty), so the handling of it is sort of up in the air at this point :/
Hi, I am a Professional Web Developer. I am a bit confused there are list on internet showing that I would be eligible going in (Data programming category or IT) and others where they only state ITC( Information and Communication Technology Technicians) how/where can I get a confirmation if my job field applies to the list? Thank you.
Very very video. Thank you. A couple of questions. My partner and I purchased a property in Porto. It’s rented out and both of us are overseas at the moment. We collect rent and have recently filed our first tax returns. Are we tax residents considering we do not live in Portugal? We intend to apply for a D7 visa eventually and move to Portugal when the tenants lease runs out. Would we be eligible for the NHR?
Thanks for the video. I look into this from Canada. For NHR retirees within or after the 10 years, what is the tax rate for capital gains if the retirees sell some of their rental properties in USA or Canada? Thanks
Hi Mchael, sorry, we don't give any tax advice and prefer to let the professionals say it. If you'd like we can refer you to someone to have a consultation regarding your tax situation. - Josh & Kalie
Thank you for the content! How do you manage to still invest in US ETFs in spite being in Europe? As far as I understand, European residents can only invest in UCITS ETFs? Thank you!
Great video, we are planing on moving end of summer, lets say we sell a property on the us this year before we move, would we still need to pay capital gain tax in Portugal next year.? Even tough we habent moved yet.
Generally, you won't be taxed fully by those countries. It's really a question for a Portuguese tax specialist that can knows your situation. If you need a Canadian expat tax person, let us know. We're friends with one living in Portugal. email info@expatseverywhere.com - Josh & Kalie
Hi, thanks for the video, very interesting and promising. Do you know if Google Adsense earnings from the ads on a personal website received outside of Portugal would qualify for NHR tax exemption?
We're working on all of this now and will update people with our personal experience (with a video). The reality is that everyone's situation is different, which is why it's important to get ahold of a tax person here in Portugal and explain your situation to them. - Josh & Kalie
@@mandywilliams5638 unfortunately in my case personal income from Adsense would not qualify for NHR, however if you set up a company and receive this income as dividends, then it fits this tax program perfectly. You will need to consult an accountant from Portugal before you make any changes.
Hi Leslie, it's best to speak to a tax specialist to explain your given situation and see what they recommend or see for you to be the most tax compliant and efficient. - Josh & Kalie
I have gotten advice from two other tax experts/accounts in PT who said differently than this guy said about state/federal pensions being taxed at 10% under NHR. Both other tax professionals said that public pensions (from a state, county, federal entity) are exempt from taxation in PT during the NHR and also after the 10 years. Now SS is not considered a federal pension, so it is taxed. EIther this guy is wrong, or the two other tax professionals are wrong.
@trave764 Regarding the Roth and 401K , I'm told yes they will be taxed but you may be able to offset with tax credits from the US-Portugal tax treaty. Need a good tax team that understands tax laws from both countries...
@@ExpatsEverywhere I had a consultation with an accountant in August 2020. I just emailed yesterday and asked him if anything had changed and he said no, it had not. I saw a webinar in October 2020 with another accountant and tax attorney and he said the same thing -- government pensions never taxed.
Love these but I'm sure like myself there are Portuguese citizens like myself who left Portugal when they were kids and still are Portuguese citizens if they move back for retirement do they have to pay taxes on their US retirement pensions, stocks etc.
Unfortunately, you'll probably need to get tax advice on both sides (US and Portugal) side to get your question truly answered. Let us know if we can help connect you with people. Email info@expatseverywhere.com - Josh & Kalie
I believe you receive a credit in the US for the taxes paid in Portugal, but depending on income, you probably still have to pay a difference since a lot of people in the US pay higher than 10% on their retirement income...
Great video! I’ve got one question: as a EU citizen, once I get the 12-months rent contract for a Portuguese property, how do I prove that I’m a Portuguese resident when applying for NHR? Do I need to make an application or get any documents or do I automatically become resident with just getting a 12 months contract?
Hi Luca, thank you. You'll need to register your address/living situation and make sure that the contract you have is registered with Finanças. - Josh & Kalie
Yeah but if I earn rental income from my home country eg Ireland, will my home country still charge me income tax even if I’m NHR resident in Portugal?
@@ExpatsEverywhere thanks guys, appreciate the response- I think this whole NHR / D7 visa is only of use for non EU folks. As I’m Irish I can legally live and work in any EU country. But would still have to pay income taxes to my native country and not to Portugal.
Another great video guys! Thanks much. Does that mean, for people receiving passive income from an asset will get the 20%-39% in US plus the 10% in portugal (49%) taxed on the income? Double taxation right? Thanks
There is a tax treaty between US and Portugal that helps avoid double taxation. There are different rules but from what I understand most of the income will not be double taxed.
You sure? From the IRS website “Generally, only income, war profits, and excess profits taxes (collectively referred to as income taxes) qualify for the foreign tax credit. Foreign taxes on wages, dividends, interest, and royalties generally qualify for the credit. “ This implies to me IRA, Roth, 401k, SS and Capital gains from brokerage accounts all will be subject to 10% tax
@@nygardenguru Yes, I agree that those will be taxed in Portugal at the 10% tax under NHS but it does not mean that it will also get taxed in the US. From what I understand but cannot confirm because I have not consulted a tax attorney in Portugal yet, is that the US-Portugal tax agreement states that private pensions are taxed at the country of residence which would be Portugal and not US. The exception is for Social Security and any other US government pension.
Thank you. Under the NHR scheme, they shouldn't. But honestly, for complex tax situations, it's best to get professional help on both ends. We've learned over time that it's saved us money finding a good tax person and paying them because they'll file it correctly while taking the legal advantages (exceptions) that sometimes us regular folks don't know about. - Josh
Great video. I have one doubt, if a person got his NHR status lets say in dec 23, but he is paying regular tax until dec. Can he claim tax refund for previous months? If yes, how?
Thank you. We're not sure if we understand your question fully. If you write Kalie at info@expatseverywhere.com, she can put you in touch with a tax person that can answer your question. -- Josh & Kalie
Tough to say if it's renewable. I'm assuming you're asking if you can spend 10 years in PT under the NHR then leave for 5 and then come back for 10 more. We don't believe the scheme was built that way. We think it's just a one time thing but can be used by Portuguese citizens as well. - Josh & Kalie
This is not really beneficial as I have to pay taxes in US and Portugal for SS, 401K, Pension and Roth IRA proceeds. Seems after 10 years you pay the the full rate of taxes.
You might not have to pay in both places for everything. Contact a tax specialist on both sides and let them know your situation. The tax treaty between the two is helpful in most but not all cases.
This info is contrary to other information I have see in other videos. There is supposed to not be double taxation of retirement income. Why is this guy saying there will be double tax???
Regardless of what information you're getting from video or blog content, the #1 advice we can give is get with a Portuguese tax specialist and go over your specific situation so that you're not caught off guard. Also, if you don't have a US tax person that knows about living abroad, it's probably time to get one as well because they'll save you time and money if your taxes aren't really straight forward. They'll know how to file the foreign earned income exclusion (it's not hard) and know about tax treaties too. - Josh
This is very useful. It is amazing how some of the 'agencies', lawyers etc go out of their way to make this subject sound extremely complicated, when in fact it isn't. However, still worth keeping your eyes wide open both at origin and in Portugal to make sure you don't make any mistakes on timing.
Hi there! As usual, well informative video! My boyfriend received a job offer (software developer) and he'll be moving to Portugal next year. The company it itself would deduct 45% taxes and 11% social security from his monthly salary. So more than half of the salary would be deducted 😓 so we're considering NHR.. we're from India, and say he moves to Portugal in May 2022, when should he apply for NHR? Till then, he should request his company to not deduct taxes from his monthly salary? Love from India 🙏❤️
Hi Ramya, you all should really look into his eligibility for it with what he's doing/income source. Have you tried to contact a tax specialist? Thanks for the compliment here. - Josh & Kalie
So if I understand, as a remote worker, working for a foreign company from a country where they have mutual agreement for a dual tax regime with Portugal , that means I’ll have to pay normal taxes like a normal Portuguese resident. ( I don’t fall into the experts category such as developer etc) Is this right?
Best bet is to contact a tax specialist to find out. Portuguese expats that return to Portugal can apply to so it's best to consult with someone or multiple tax people to find out. We're not the experts. - Josh & Kalie
@@ExpatsEverywhere hehehe I’m not Portuguese, but I do have some Portuguese in my blood hehehe. Yes, waiting a respond from a couple of tax agents. Thanks 😊 Loving your videos!
@@Serenity_seeker_nz 😊Hey, I wasn't assuming you were. I just meant that the NHR isn't as straightforward as it's presented so even Portuguese people have access to it. It's really safest to check with a pro. - Josh & Kalie
Very informative!! NHR sounds like the way to go and a great tax advantage program!! Especially interesting to me was about having your NIF before becoming a tax resident since we have ours, but haven't moved yet so that is good!! I'd much rather pay 10% as opposed to 28 Or 48% anyday!! We will not miss the deadline of March after you move...Sounds like you snooze you lose! Thanks for the great info!!
@trave764 Not sure about the 38%, but it sounds like if you want to be legal and a tax resident you would be double taxed...But, depending on your SS amount 10% is way better than 28, 38 or 48%! I've been looking into working in Portugal and there are a lot of tax incentives to going there, well as opposed to France where I live anyhow! Ya, double taxation is not good, but 10% is not bad compared to most places! I had never heard of this deadline either, but if the info is true I want in and will certainly check into it!!
@trave764 It sounds like it from this video, but I would certainly check into the information before moving! Could in fact make a difference in your decision! You know, it's like many things you can do it legally or not quite so...I've had many friends who've lived in France who do not adhere to the 'tax' rules and do not use the system for benefits and have lived here without problem! All in how you want to do things, but it depends on your situation! I have money transfered in from the US and have never had a problem. You need a int'l tax accountant I think if you want to live quietly!!
@@tamaramadelin4831 I didn’t realize that visa status and tax status are independent of each other until this video. I guess your friends in France have long term visa to legally stay in the country but don’t follow the tax requirements? I guess I wouldn’t need to use the country’s benefits (I would get private health insurance, for example). Also, I would assume Portugal wouldn’t know about your pensions/other sources of income unless those sources were disclosed as a way to qualify for Visa income requirements? Thanks for posting your comment!
@@FreeToBe_Me I agree...Exactly! If you stay off the radar you won't have a problem! Ya, many tried to follow the visa requirements, but the slow system didn't allow for that! I had friends who live legally and illegaly and if you do not try and take advantage of the system you probably won't have a problem...Depends on how you want to do things I guess!!
@trave764 He said social security "may" be taxed both in US and Portugal. It might be that you may not owe any taxes in the US depending on your income. Under the NHR regime you would pay 10% tax in Portugal. (from what I understand and have researched)
This is not looking so good. 😅😅 I wonder if the US gives its citizens living abroad a tax credit for income tax paid to another country (if there’s a tax treaty)? Otherwise, you’re screwed. 😬 (EDIT: I watched the other tax video linked at the end. It answered my question.)
There is a tax treaty between US and Portugal which helps you avoid double taxation in many cases but maybe not all. Good to consult with a tax advisor who understands the taxes in both countries.
Hi, If my company is in Bulgaria and I have NHR in Portugal. what taxes do I need to pay in Portugal? I know there is a 0 tax but to I need to pay social tax? and what other taxes do I need to pay?
Hi, slightly confused when one becomes a resident vs nhr status. If I move in January 2023 and become a resident that month and apply for the nhr by march 2023, does this mean I am qualified for the 20% tax rate that financial year ie 2023 or would I need to wait till 2024?
If you get residency in January 2023, you have until March of 2024 to register for NHR (better to do it before though) and you file your taxes by the end of June 2024 and pay by the end of August 2024 for the financial year 2023. So you would be paying the NHR tax rate for the income source which could be 0, 10 or 20% depending on the income source for the tax year of 2023. Does that help? - Josh
With these changes , it wouldn’t make sense to move to Portugal ....as a US citizen retiree you will pay taxes in the US and then 10% on gross in Portugal
At present, for capital gains on US equities, as a non-US citizen, the tax situation is not fantastic under NHR. I will have to buy and hold my shares for a period of 5 years without selling, in order to avoid being taxed at the Portuguese rates. I plan to do this until I get the citizenship and then relocated to Thailand, where I can take the gains tax free. As an alternative, I could move to dividend stocks and accept the WT hit from the IRS. Inconvenient. At least crypto is completely tax free. However, I wonder what the status of income form yield farming is? In particular for decentralized applications? Any info on that?
We have a feeling after speaking with various people in the financial industry that crypto tax legislation is coming. Our recommendation would be to speak to a specialist about your specific situation. - Josh & Kalie
@@ExpatsEverywhere Thanks for the feedback. I have actually reached out to two lawyers and both assured me that cap gains on crypto are tax free according to an announcement by the Tax department. Neither mentioned pending legislation. However, I will be in Portugal this year and it is unlikely to be retroactive.
@@thecryptostrategist2433 You're welcome. No, as far as we know there's no pending legislation but it's something that people are predicting. No capital gains on crypro is a huge incentive for traders to move here, but then again Portuguese could face pressure from other EU countries if they're taxiing it and PT isn't.
@@ExpatsEverywhere Oh i have no doubt that traders are already taxable in Portugal, as it is their living. I'm not a trader. I mined all my personal BTC in 2013-4 and have held ETH since shortly after launch. I do have some cheap hot alts that are more short term holdings, but for me, short term means 6 months to a year. I don't think I have CGT concerns on token liquidations, but I do think that the interest earned from yield farming could be taxable. I will investigate further. Thanks.
I feel NHR is useless for US citizen. As it says, if its taxed in the other country mandated in the tax treaty the tax is exempted. But if its already taxed in the other country and there is tax treaty between US and Portugal, you will not be double taxed whether there is NHR or not. It might make some senses for citizens of other countries, but its useless for US citizen because US charge the same tax for its citizens no matter where they live.
@@ExpatsEverywhere Thanks for the reply. How about capital gain? Instead of paying 0% to 20% tax in the States, you have to pay 28% flat rate tax, is that right? And is dividend only taxed in US according to the treaty, so its same before and after move for US citizen?
@@kursorken Kind of a late reply here, but US citizens don’t pay capital gains tax in Portugal. There is a new court ruling spring 2022 and it clarified that under the NHR, capital gains are exempt because they are taxable by the United States. The wording of the NHR legislation was misinterpreted in the past and the Portuguese tax authorities programmed their tax collection accordingly. This is supposed to be corrected according to an accountant firm we spoke today. Dividends, rental income and interest are not taxed in Portugal under the NHR. Capital gains also not, but this is pending. There is a recommendation to extend the filing deadline to allow for the correction of the collection process by the tax authorities. In case you are in Portugal it is important you find a reputable accountant firm who is on top of this. We spoke to an accountant who went by the old collection scheme and was ready to take 28% of capital gains tax from us. I thought this doesn’t make any sense and got another opinion.
Good morning, by adhering to the NHR tax regime, is it possible to enjoy the exemption of capital gains from financial gains (professional trader) as a natural person by operating with a broker outside Portuguese territory? Or is it necessary to open a company to trade in another country, such as in territorial tax states like panama ..? Thanks so much, great videos !
Hey Stefano, thanks for the comment. It's probably best to contact a tax specialist about these kinds of questions because everyone's situation is different. Do you want some recommendations? - Josh & Kalie
Do they not have tax allowances for capital gains like in the UK? Straight off 28% of my gains stolen is hard to swallow 😢 Why did I have to fall for a Portuguese woman 😅
For those of us concerned about stock capital gains taxes if going with NHR (which seem to be up to 28%), I found this recent article of a court case which seems to suggest they are no longer taxed if already taxed in the US for example... search term-> us-citizens-and-portuguese-nhr-tax-regime-saved-by-the-savings-clause
Hi Josh,
I was contemplating D7 visa all along and of course it is the easiest and least financial impacting pathway to long term residency in Portugal. While on the surface it looks great, a very careful review into one’s specific income situation needs to be done before jumping into the D7.
I did a lot of researching on the Tax implication under D7, and here below is what I found, and I may be wrong because most of the info is from the YT videos listening to Tax talk etc.
1. By default under a D7 visa, like it or not you are a Tax resident of Portugal. No getting out of it.
2. For taxable income calculation under D7 they consider Global income from all sources.
3. For those who are retirees, their SS income will be taxed, along with Pensions and any other passive, dividend, cap gains etc.
4. I am sure there are many retirees who have their 401k and other investments in mutual funds / stocks etc and that income also joins the pool of taxable income.
5. For those that are a little older than retirement age when they draw their RMD (required Minimum distribution) from the 401k, IRS in US considers it as a Taxable income. So, anyone in that situation (Over age 72) will get hit with that income also as Taxable income.
6. There are a lot of Professional career retirees that easily fall in a much higher income from SS alone to the tune of $65K gross as a couple + income from other savings. My gut feel is that this category of people are easily in the AGI (Adjusted Gross income) of $80K on an average.
7. When you look at the US tax tables, after exemptions etc, your net tax will be around 15-18% of your Gross in that range of AGI.
8. Now Portugal Tax rates for say $80K (70K Euro) is about 40% that puts your Tax payable at 28K Euro. This is significant.
9. You may argue that Portugal and US have a Dual Taxation agreement and you can get the refund of Taxes paid in Portugal. There is an important Caveat on this Dual Taxation rule called the “TIE BREAKER” clause that determines if Portugal has a right to impose their tax rates and collect if desired. Not sure if this is specific to UK and Portugal or Portugal and any country. See at approx. 8:50 time mark in the video below.
ruclips.net/video/-QSI68f7G8U/видео.html
10. After going through the inner finer details, I think the D7 is a good option for the people who are in the lower AGI on their Tax form, and those that are a little wealthier will get hit hard.
11. I did look at the NHR option, there again they tax your pension, SS, cap gains and as you age when other incomes like RMD etc., come into the picture in your later life your tax liability will only go up.
I am now very skeptical about the D7 or the NHR options though they look very attractive on the surface. One of the options I would consider is splitting time between Schengen Europe or Non- Schengen countries using the 90/180 day visa rule and not be a Tax entity of any country other than US.
There is no easy way out of Taxes, and at the end of the day Every one is after your TAX MONEY.
Can you please do a video on this subject and throw different scenarios of income in retirement at say $ 30K, $60K, and $80K and project the tax liabilities with the Tax experts in a vlog.
Thanks!
Hey, I can tell you this much, we don't want to create many more videos about taxes. 😁 That's for sure. Our best bit of advice is to speak to several tax specialist before moving and know your liabilities. Everyone's situation is different from remote workers to retirees. Nothing is truly black and white. We're learning that now. SEF and the visas are separate from Finanças and NHR so it's not exactly far to say anything certain about D7, D2 or even GV because those are not considered when talking about NHR. - Josh
I think you got this right!- I kept my business in the US while getting an unlimited EU residence permit in Germany. Some people say: "Italy is the new Portugal"...Seems that expats pay now less taxes there than in PT.
Excellent information and suggestions. If you come across the 30, 60 and 80K income scenarios of have any explanation for those categories please post or let me know. Based on this, it appears to me that Portugal is not a good option for US citizens who want to pay less taxes over long periods of time. Thank you.
Yes!! No doubt to what Cookmaster is stating above…I have a massive Distribution worksheet to assist us in minimizing our US taxes on 401K (not to even mention So-So or the impacts of RMDs) across retirement yrs. My understanding of the US reciprocal tax agmt is that it was designed to PREVENT the very double taxation that Augusto is describing. He does not cover anything regarding 401Ks, just loosely ‘Pensions’. A lot of people (& a lot of $$) will make a u-turn from the Portugal path if there is even a whiff of dbl taxation…is this why everyone has been saying ‘Portugal is dead?’
I would be super interested to hear more clearly described data re:401K income & how Portugal is insuring folks are not taxed twice = )
Capital gains should not be taxed in Portugal under the NHR program. This is one is an important topic. Americans under the nhr regime are supposed to pay 28% capital gains on the sale of us stocks. Your accountant may believe that you as a US person should be subject to the 28% taxes that applies to residents of other countries who have nhr status and another accountant thinks you should not pay this tax. There was a recent court ruling that said that Portugal can’t tax capital gains because the United States has citizenship based taxation and does tax their citizens capital gains. It is noted under the “savings clause” in the treaty. Portugal does not have the right to tax capital gains tax based on the wording of the nhr legislation. This was a court ruling and supposedly not binding but your accountant who prepares your taxes can take this direction in your Portuguese tax return. You shouldn’t have to pay this!
I found this out because I was surprised that capital gains were going to be taxed despite the United States already taxing capital gains, but passive income such as dividends, interest and rental income isn’t (the Portuguese argument that it is already being taxed in the USA). Contradiction, right?
Unfortunately, the accountant is not very specific in this video. He is very vague. Remember, you as a United States citizen you already pay capital gains taxes, vs a British person leaving the UK to live in Portugal is being exempt from his home country , so he/she pays capital gains tax in Portugal.
Some things to take into consideration: Some of the social security income may not be taxed in the US, for example if you earn under the minimum threshold. There is also a distinction on the rules for public pensions and private pensions. IRAs, 401Ks and Roth IRAs from what I understand, are considered private pensions.
Super video! I applauded for $5.00 👏👏
Thank you, Gerry! That's really kind of you. 🙏 - Josh & Kalie
This is all sounds so complicated to me... A thousand different scenarios and 10 thousand different answers!
I think a clarification needs to be added...if your paying US taxes on your pension (which most if not all US citizen's will be) it will be much higher than 10% and thus negating the 10% Portuguese tax on pension's because the tax treaty states that basically the higher of the 2 is paid. For example, if my effective tax rate in the US is 18% on all income including pensions, then you will pay zero in Portuguese taxes because its already taxed at a higher rate than 10%. If for example, your country of citizenship does not tax you on your pension then the 10% Portuguese tax would apply.
Is this correct? It sounds good but does not match what I keep hearing. Can you state where you got this information?
That is 100% correct
@@edbarnard7157 Source of this information?
Great Video! The Best Informative for my situation! You asked all the RIGHT Questions!! Excellente' lol just having fun. SERIOUSLY, EXCELLENT!!!
Thank you. Glad it was helpful! - Josh & Kalie
The tax treaty between the U.S. and Portugal used to exempt government pensions from both countries. That is the current treaty posted by the US government. When did that change and where is the official treaty making the change available?
The change was from this year and we don't have a link to the official treaty. Sorry. - Josh & Kalie
Hi Josh, I think I am lost among all the things I need to learn. I just arrived to Porto; I have online businesses, and am overwhelmed by the amount of information that you need to know on how to do taxes here, if NHR is the best option, or IRS or IRC, still don't have a residence and would like to know if opening activity here is the way to go, or even studying a course under article 92. I can't find clear information online at all, I've spent days looking for information about taxes and residency!. I even went to the CNAIM and they recommended to talk to an accountant. I am still paying taxes in the US and I don't know when to stop activities there and start here. I saw you interviewed several accountants, who would you recommend to talk to? It would be even better if they are in Porto, where I am living now. Thank you!
Get a good accountant that can do what you're trying to do. Don't try to do everything on your own. - Josh & Kalie
email Kalie at info@expatseverywhere.com and she'll be able to make some introductions. - Josh & Kalie
Thanks for continuing to make such great content! I’m impressed by Taxes for Expats. I also recall a superb discussion you had with Stephen Boush. I know it’s not your role to advise what CPA to seek advice from but would love some direction if you have it about their strengths and weaknesses (if possible). Thanks again!
Thanks, Seamus. We appreciate your kind comment. Honestly, we would use either. Both have expat tax experience and straightforward portals. Price-wise they're similar too depending on how complex your tax situation is of course. Our advice would be to email them or set up a consultation after tax season (unless you need someone ASAP) so you can see who will serve you best. Hope that helps! - Josh & Kalie
Thanks so much to the three of you. What a beautiful family you are!
Given the double taxation the big question is there an international tax credit on the US side for Portugal taxes. I had heard once there is. This all could be a major disincentive in moving to Portugal. Also Tax on capital gains from Stock accounts I believe
If your income is foreign earned income exclusion eligible, you shouldn't have to worry about double taxation. - Josh & Kalie
Yeah I have to agree on this! Definitely a disincentive! Shame...
@@mrsiz218 Definitely and after 10 years NHR ends and Portugal tax is 48% for over 80k income. On top of that you always will have to pay US tax. They (EU?) is making it impossible and really discouraging making it out of reach. Fine I don’t need these high taxes to move to a poorer country than the US and lower my standard of living! unless I’m living off grid and paid less than 20k for a plot of land.
@trave764 AGREE! 100%! If you’re right about the 10% then we would still make the move. 10% is livable. I can do that. Thank you for taking the time to reach out! Means a lot to me!❤️❤️
The 10% not too bad assuming 40k retirement income of which 30k taxable at 10% fine only 3k. US tax with deductions maybe 2k fine living large ~3k a month. After 10'years 45% taxable on 40k plus US taxes puts you at 20k taxes, 20k yearly income or $1666 monthly, big difference enough to survive presumably depending on housing situation, other assets, savings, but not living large, brought down to Portuguese standards of living. Over the long term 20-30 years Portugal may be more expensive or about equal cost to US living
Is the 10% tax on the entire amount? And does it subtract what you already paid to the US. An example. Get 60K pension and pay 8K in federal taxes in the US, will I be charged 6K (10%) on the 60K in Portugal and need to pay that for a total of 14K?
I've been wondering this same thing but can never find an answer?
Is income earned from RUclips AdSense taxed under the NHR regime? RUclips considers this royalties, but I'm guessing Portugal would tax it as earned income at 20%?
We haven't been through a tax period yet so we'll fill everyone in once we do. We'll give our experience. - Josh & Kalie
Well, this video has been very enlightening. I was planning to retire in Portugal but having my Social Security taxed in the U.S. and in Portugal as well, eliminates Portugal as a retirement destination for me. That's a shame.
Sorry to hear that, Chuck. Try to connect with a tax professional to know what your tax burden will more accurately be if Portugal is a dream of yours. - Josh & Kalie
Nice video guys. Thank you!
Our pleasure! Thanks for watching and commenting. It took a while to get this one out, but we appreciate you being patient. - Josh & Kalie
Thanks for this! But if I’m hearing this right? We may not be making the move after all! 48%?! Yeah no just no. And hubby will NEVER go for that! BUT we will happily visit and often! 💔💔
Yeah right
You're welcome. It's 48% in the highest bracket and on earns over that threshold. Check out this link Table 2.5 portugalglobal.pt/EN/InvestInPortugal/fiscalsystem/Paginas/PersonalIncomeTaxIRS.aspx
And again, get in the NHR scheme and you don't have to worry about this until after 10 years. At that point, you can always move. 😅 - Josh & Kalie
@@ExpatsEverywhere thanks guys!! You rock!! ❤️❤️❤️
So very helpful! You guys are the best! Thank you! 🙏✨💓
Great! Thank you , Elizabeth. We're glad you got value from it. - Josh & Kalie
Love how concise this was
Thanks for the feedback, Kylan! - Josh & Kalie
I've been wondering about the specifics of this plan.
Thank you!!
You're welcome. Glad to hear it. - Josh & Kalie
Thanks for sharing! I am interested to know how you are handling your income from RUclips. Did you guys register as a business/self-employed in Portugal and what do taxes look like for that? I talked to an accountant in Portugal and he highly discouraged me from having earned income from online businesses if we move to Portugal as we would be taxed in the progressive tax rate since "creator, freelance, writer" are not in the list that is eligible for the 20% tax rate.... If you guys could share, that would be great.
Hi, we haven't gone through the tax process in Portugal yet because we became residents in 2021. We will file next year and can make a video on that. Our RUclips channel is registered in the US and we have no fiscal ties to Portugal with ExpatsEverywhere LLC. - Josh & Kalie
@@ExpatsEverywhere Thanks for replying. I would love to see a video about that once you guys go through the process. Not to be a party pooper, but so is my business- registered in the US and no ties to Portugal, but according to the accountant, any income earned abroad (i.e. US), even passive income from ads, while a tax resident of Portugal is taxed at the progressive rates...which start at EUR ~4,000 so pretty low... it seems that the NHR regime is really geared to retirement income alone... hoping to figure this out, so we can decide if we should move.
@@Goodlifexplorers honestly, we think you should get a second opinion.
We will too. 🙏
@@ExpatsEverywhere So much conflicting information, that is why I will be interested to know how it goes next year when you guys actually file for taxes. Please share then...
Do American pay the full US tax and an additional Portuguese tax of 10% ???
Good questions. If you do your taxes correctly, you shouldn't have to pay both if let's say you take up residency in Portugal and spend the majority of your time there.
I think Stephen explains it more completely here: ruclips.net/video/qfkW8SHJV7o/видео.html
Hello Josh and Kalie,
Thanks for always sharing vital information. Is it possible for you to share how in details to register for the nhr on the tax portal as I have been trying and do not understand the tabs that correspond to registering for the NHR . Thanks in advance.
Hey, thank you. Sorry about the late reply. We're wading through this whole NHR thing. We're not the ones to rely on when it comes to registering because we had a lot of technical issues that we need a few services to help us sort out. - Josh & Kalie
Thank you gor this great video.
I am an israeli software engineer. Lately I got my Portuguese citizenship. I have a US LLC company registered in Wyoming. The conpany offers online services worldwide (US and portugal are not between the company's clients).
I am trying to understand how can I get money out of the company with 0%? Is it possible with the NHR? How should I be paid in portugal? As employee in the company with monthly salary? By devidents? Will I have to live in portugal 6 months per year, every year?
Thanks
and you do work from Portugal? have you heard about Pernament Establishment? if you work from Portugal and stay there more than 183 days and you are a tax resident there.. and you didn't registered here as self-employed or employee or you manage this US LCC... you are a tax evader ;)
Wow, thank you SO much for this super helpful video. I am a Dutch full-time artist currently residing in the UK. My partner and I are moving to Portugal next year and I'm hoping I will be eligible for the NHR scheme as it looks like artists are on the list of high value professions.
Glad it was helpful! Please make sure that you reach out to a professional tax consultant about your specific situation. - Josh & Kalie
@@ExpatsEverywhere I will definitely do that, thanks guys :)
Good info. Under NHR tax regime if I have online businesses such as selling products on Amazon or Etsy or on other marketplaces I would be taxed 20%, am I correct? In addition to that, I have to pay social security tax of 10%? As a foreigner selling online in the US my income subject to 30% tax. How's the double tax treaty between Portugal and the US handle in this situation?
Our advice would be to contact someone like Augusto to be precise answers to your exact situation. Thanks for watching and commenting. - Josh & Kalie
Very informative 👍 thank you
Does anyone know how Portuguese tax treats traditional IRA and Roth IRA? Just like pension? 10% tax at gross?
I think Roth IRA is treated the same as in the US - - not taxable. But I got my info from Google
@@FreeToBe_Me unfortunately not true. The Roth is a US tax-advantaged vehicle and has no parallel, or mention, in the tax treaty between the two countries (Portugal has no obligation to honor US tax structures, unless in the treaty), so the handling of it is sort of up in the air at this point :/
@@shanash1 I guess I would take the “Until I’m asked, I won’t tell.” policy. 😅
@trave764 i definitely don’t know the answer. I am curious as to how these changes will affect the numbers of foreigners moving to Portugal.
@@FreeToBe_Me this is possibly one way to do things. #notfinancialadvice :)
Hi, I am a Professional Web Developer. I am a bit confused there are list on internet showing that I would be eligible going in (Data programming category or IT) and others where they only state ITC( Information and Communication Technology Technicians) how/where can I get a confirmation if my job field applies to the list? Thank you.
Eligible for what exactly?
@@ExpatsEverywhere for the NHR Tax Regime.
@@vommir. Gotcha. The best thing to do would be to contact Augusto (apaulino@grupoyour.pt ) or another tax specialist. - Josh & Kalie
there is double taxation when you're retired and have pension income, so you need to figure out if it's worth it
Very very video. Thank you. A couple of questions. My partner and I purchased a property in Porto. It’s rented out and both of us are overseas at the moment. We collect rent and have recently filed our first tax returns. Are we tax residents considering we do not live in Portugal? We intend to apply for a D7 visa eventually and move to Portugal when the tenants lease runs out. Would we be eligible for the NHR?
Thanks for the video. I look into this from Canada. For NHR retirees within or after the 10 years, what is the tax rate for capital gains if the retirees sell some of their rental properties in USA or Canada? Thanks
Hi Mchael, sorry, we don't give any tax advice and prefer to let the professionals say it. If you'd like we can refer you to someone to have a consultation regarding your tax situation. - Josh & Kalie
Thank you for the content! How do you manage to still invest in US ETFs in spite being in Europe? As far as I understand, European residents can only invest in UCITS ETFs?
Thank you!
Great video, we are planing on moving end of summer, lets say we sell a property on the us this year before we move, would we still need to pay capital gain tax in Portugal next year.? Even tough we habent moved yet.
Thank you. It's best to talk to a tax specialist regarding this. There could be tax liabilities based on the timing of property sales. - Josh & Kalie
How does the taxation of stocks / capital gains look like when the brokerage is in Portugal ?
What is your country has a Tax treaty with Portugal for example Canada and Portugal
Generally, you won't be taxed fully by those countries. It's really a question for a Portuguese tax specialist that can knows your situation. If you need a Canadian expat tax person, let us know. We're friends with one living in Portugal. email info@expatseverywhere.com - Josh & Kalie
Hi, thanks for the video, very interesting and promising. Do you know if Google Adsense earnings from the ads on a personal website received outside of Portugal would qualify for NHR tax exemption?
We're working on all of this now and will update people with our personal experience (with a video). The reality is that everyone's situation is different, which is why it's important to get ahold of a tax person here in Portugal and explain your situation to them. - Josh & Kalie
@@ExpatsEverywhere can you recommend someone who could consult me online on this matter? Thank you.
Hi, did you manage to find answers to your question? I'm in a similar situation.
@@mandywilliams5638 unfortunately in my case personal income from Adsense would not qualify for NHR, however if you set up a company and receive this income as dividends, then it fits this tax program perfectly. You will need to consult an accountant from Portugal before you make any changes.
Does that mean that as a couple, we have to pay 20 percent to Portugal? Not doable for us.
Hi Leslie, it's best to speak to a tax specialist to explain your given situation and see what they recommend or see for you to be the most tax compliant and efficient. - Josh & Kalie
I have gotten advice from two other tax experts/accounts in PT who said differently than this guy said about state/federal pensions being taxed at 10% under NHR. Both other tax professionals said that public pensions (from a state, county, federal entity) are exempt from taxation in PT during the NHR and also after the 10 years. Now SS is not considered a federal pension, so it is taxed. EIther this guy is wrong, or the two other tax professionals are wrong.
Just curious, Steve, how long ago did you ask them? Because from the sound of it, it used to be that way, but now it's not. - Josh & Kalie
The law changed last year due to other countries in Europe complaining and threatening to put Portugal on a blacklist.
@trave764 Regarding the Roth and 401K , I'm told yes they will be taxed but you may be able to offset with tax credits from the US-Portugal tax treaty. Need a good tax team that understands tax laws from both countries...
@@davidmartinspresents Wow, that's rough. - Josh & Kalie
@@ExpatsEverywhere I had a consultation with an accountant in August 2020. I just emailed yesterday and asked him if anything had changed and he said no, it had not. I saw a webinar in October 2020 with another accountant and tax attorney and he said the same thing -- government pensions never taxed.
Ok. I’m still totally confused. Is my USA Social Security taxable in Portugal under NHR and after NHR
Love these but I'm sure like myself there are Portuguese citizens like myself who left Portugal when they were kids and still are Portuguese citizens if they move back for retirement do they have to pay taxes on their US retirement pensions, stocks etc.
Unfortunately, you'll probably need to get tax advice on both sides (US and Portugal) side to get your question truly answered. Let us know if we can help connect you with people. Email info@expatseverywhere.com - Josh & Kalie
Too bad that tax exemption was ended in March 2020. Being taxed on SSI and pension in USA and Portugal is not good .
Right! - Josh & Kalie
Hi Hector. Because of the tax treaty between the US and Portugal, you do NOT pay double tax on all of your retirement income.
I believe you receive a credit in the US for the taxes paid in Portugal, but depending on income, you probably still have to pay a difference since a lot of people in the US pay higher than 10% on their retirement income...
Hello everybody. Does my salary from abroad can be taxed under NHR?
Great video!
I’ve got one question: as a EU citizen, once I get the 12-months rent contract for a Portuguese property, how do I prove that I’m a Portuguese resident when applying for NHR? Do I need to make an application or get any documents or do I automatically become resident with just getting a 12 months contract?
Hi Luca, thank you. You'll need to register your address/living situation and make sure that the contract you have is registered with Finanças. - Josh & Kalie
@@ExpatsEverywhere Thanks so much for your reply 🙏
@@LucaMss You're welcome.
You kept asking him the same questions over and over, lol. This happened in your TieTax interview too.
Yeah but if I earn rental income from my home country eg Ireland, will my home country still charge me income tax even if I’m NHR resident in Portugal?
Hi Jay, we really recommend speaking to a tax specialist to find out your liabilities. - Josh & Kalie
@@ExpatsEverywhere thanks guys, appreciate the response- I think this whole NHR / D7 visa is only of use for non EU folks. As I’m Irish I can legally live and work in any EU country. But would still have to pay income taxes to my native country and not to Portugal.
Another great video guys! Thanks much. Does that mean, for people receiving passive income from an asset will get the 20%-39% in US plus the 10% in portugal (49%) taxed on the income? Double taxation right? Thanks
There is a tax treaty between US and Portugal that helps avoid double taxation. There are different rules but from what I understand most of the income will not be double taxed.
You sure? From the IRS website “Generally, only income, war profits, and excess profits taxes (collectively referred to as income taxes) qualify for the foreign tax credit. Foreign taxes on wages, dividends, interest, and royalties generally qualify for the credit. “ This implies to me IRA, Roth, 401k, SS and Capital gains from brokerage accounts all will be subject to 10% tax
@@nygardenguru Yes, I agree that those will be taxed in Portugal at the 10% tax under NHS but it does not mean that it will also get taxed in the US. From what I understand but cannot confirm because I have not consulted a tax attorney in Portugal yet, is that the US-Portugal tax agreement states that private pensions are taxed at the country of residence which would be Portugal and not US. The exception is for Social Security and any other US government pension.
Thank you. Under the NHR scheme, they shouldn't. But honestly, for complex tax situations, it's best to get professional help on both ends. We've learned over time that it's saved us money finding a good tax person and paying them because they'll file it correctly while taking the legal advantages (exceptions) that sometimes us regular folks don't know about. - Josh
@@ExpatsEverywhere I totally agree, it's best to seek a qualified professional for these tax situations.👍
Great video. I have one doubt, if a person got his NHR status lets say in dec 23, but he is paying regular tax until dec. Can he claim tax refund for previous months? If yes, how?
Thank you. We're not sure if we understand your question fully. If you write Kalie at info@expatseverywhere.com, she can put you in touch with a tax person that can answer your question. -- Josh & Kalie
So if we leave Portugal for 5+ years, can we apply for the NHR again?
Tough to say if it's renewable. I'm assuming you're asking if you can spend 10 years in PT under the NHR then leave for 5 and then come back for 10 more. We don't believe the scheme was built that way. We think it's just a one time thing but can be used by Portuguese citizens as well. - Josh & Kalie
I talked to an accountant firm today and they said one can reapply after 5 years after you abandoned your NHR status . You can confirm this of course.
Are you able to refer an attorney to help with the NBR residency application?
We're not sure what NBR is. Do you mean NHR? - Josh & Kalie
@@ExpatsEverywhere yes
This is not really beneficial as I have to pay taxes in US and Portugal for SS, 401K, Pension and Roth IRA proceeds. Seems after 10 years you pay the the full rate of taxes.
You might not have to pay in both places for everything. Contact a tax specialist on both sides and let them know your situation. The tax treaty between the two is helpful in most but not all cases.
This info is contrary to other information I have see in other videos. There is supposed to not be double taxation of retirement income. Why is this guy saying there will be double tax???
Regardless of what information you're getting from video or blog content, the #1 advice we can give is get with a Portuguese tax specialist and go over your specific situation so that you're not caught off guard. Also, if you don't have a US tax person that knows about living abroad, it's probably time to get one as well because they'll save you time and money if your taxes aren't really straight forward. They'll know how to file the foreign earned income exclusion (it's not hard) and know about tax treaties too. - Josh
This is very useful. It is amazing how some of the 'agencies', lawyers etc go out of their way to make this subject sound extremely complicated, when in fact it isn't. However, still worth keeping your eyes wide open both at origin and in Portugal to make sure you don't make any mistakes on timing.
Thank you!
True. Although, depending on how nuanced someone's situation is, it might be worth having a tax specialist file. - Josh & Kalie
Hi there! As usual, well informative video! My boyfriend received a job offer (software developer) and he'll be moving to Portugal next year. The company it itself would deduct 45% taxes and 11% social security from his monthly salary. So more than half of the salary would be deducted 😓 so we're considering NHR.. we're from India, and say he moves to Portugal in May 2022, when should he apply for NHR? Till then, he should request his company to not deduct taxes from his monthly salary?
Love from India 🙏❤️
Hi Ramya, you all should really look into his eligibility for it with what he's doing/income source. Have you tried to contact a tax specialist? Thanks for the compliment here. - Josh & Kalie
@@ExpatsEverywhere Is there a tax specialist for foreigner want to live and work in Portugal that you can recommend?
So if I understand, as a remote worker, working for a foreign company from a country where they have mutual agreement for a dual tax regime with Portugal , that means I’ll have to pay normal taxes like a normal Portuguese resident. ( I don’t fall into the experts category such as developer etc)
Is this right?
Best bet is to contact a tax specialist to find out. Portuguese expats that return to Portugal can apply to so it's best to consult with someone or multiple tax people to find out. We're not the experts. - Josh & Kalie
@@ExpatsEverywhere hehehe I’m not Portuguese, but I do have some Portuguese in my blood hehehe. Yes, waiting a respond from a couple of tax agents. Thanks 😊
Loving your videos!
@@Serenity_seeker_nz 😊Hey, I wasn't assuming you were. I just meant that the NHR isn't as straightforward as it's presented so even Portuguese people have access to it. It's really safest to check with a pro. - Josh & Kalie
Very informative!! NHR sounds like the way to go and a great tax advantage program!! Especially interesting to me was about having your NIF before becoming a tax resident since we have ours, but haven't moved yet so that is good!! I'd much rather pay 10% as opposed to 28 Or 48% anyday!! We will not miss the deadline of March after you move...Sounds like you snooze you lose! Thanks for the great info!!
@trave764 Not sure about the 38%, but it sounds like if you want to be legal and a tax resident you would be double taxed...But, depending on your SS amount 10% is way better than 28, 38 or 48%! I've been looking into working in Portugal and there are a lot of tax incentives to going there, well as opposed to France where I live anyhow! Ya, double taxation is not good, but 10% is not bad compared to most places! I had never heard of this deadline either, but if the info is true I want in and will certainly check into it!!
@trave764 It sounds like it from this video, but I would certainly check into the information before moving! Could in fact make a difference in your decision! You know, it's like many things you can do it legally or not quite so...I've had many friends who've lived in France who do not adhere to the 'tax' rules and do not use the system for benefits and have lived here without problem! All in how you want to do things, but it depends on your situation! I have money transfered in from the US and have never had a problem. You need a int'l tax accountant I think if you want to live quietly!!
@@tamaramadelin4831 I didn’t realize that visa status and tax status are independent of each other until this video. I guess your friends in France have long term visa to legally stay in the country but don’t follow the tax requirements?
I guess I wouldn’t need to use the country’s benefits (I would get private health insurance, for example).
Also, I would assume Portugal wouldn’t know about your pensions/other sources of income unless those sources were disclosed as a way to qualify for Visa income requirements? Thanks for posting your comment!
@@FreeToBe_Me I agree...Exactly! If you stay off the radar you won't have a problem! Ya, many tried to follow the visa requirements, but the slow system didn't allow for that! I had friends who live legally and illegaly and if you do not try and take advantage of the system you probably won't have a problem...Depends on how you want to do things I guess!!
@trave764 He said social security "may" be taxed both in US and Portugal. It might be that you may not owe any taxes in the US depending on your income. Under the NHR regime you would pay 10% tax in Portugal. (from what I understand and have researched)
🔥🔥🔥🔥
😊 - Kalie
This is not looking so good. 😅😅
I wonder if the US gives its citizens living abroad a tax credit for income tax paid to another country (if there’s a tax treaty)? Otherwise, you’re screwed. 😬 (EDIT: I watched the other tax video linked at the end. It answered my question.)
There is a tax treaty between US and Portugal which helps you avoid double taxation in many cases but maybe not all. Good to consult with a tax advisor who understands the taxes in both countries.
Hi, If my company is in Bulgaria and I have NHR in Portugal.
what taxes do I need to pay in Portugal?
I know there is a 0 tax but to I need to pay social tax? and what other taxes do I need to pay?
do you manage or do any work for your company? or you are a passive share holder?
Hi, slightly confused when one becomes a resident vs nhr status. If I move in January 2023 and become a resident that month and apply for the nhr by march 2023, does this mean I am qualified for the 20% tax rate that financial year ie 2023 or would I need to wait till 2024?
If you get residency in January 2023, you have until March of 2024 to register for NHR (better to do it before though) and you file your taxes by the end of June 2024 and pay by the end of August 2024 for the financial year 2023. So you would be paying the NHR tax rate for the income source which could be 0, 10 or 20% depending on the income source for the tax year of 2023. Does that help? - Josh
With these changes , it wouldn’t make sense to move to Portugal ....as a US citizen retiree you will pay taxes in the US and then 10% on gross in Portugal
There shouldn't be double taxation. Josh's interview with Stephen clarifies this better: ruclips.net/video/qfkW8SHJV7o/видео.html
Boa tarde,que esteja tudo bem na medida possível para vós.felicidades.
Obrigado! 🙏 - Josh & Kalie
At present, for capital gains on US equities, as a non-US citizen, the tax situation is not fantastic under NHR. I will have to buy and hold my shares for a period of 5 years without selling, in order to avoid being taxed at the Portuguese rates. I plan to do this until I get the citizenship and then relocated to Thailand, where I can take the gains tax free. As an alternative, I could move to dividend stocks and accept the WT hit from the IRS. Inconvenient. At least crypto is completely tax free. However, I wonder what the status of income form yield farming is? In particular for decentralized applications? Any info on that?
We have a feeling after speaking with various people in the financial industry that crypto tax legislation is coming. Our recommendation would be to speak to a specialist about your specific situation. - Josh & Kalie
@@ExpatsEverywhere Thanks for the feedback. I have actually reached out to two lawyers and both assured me that cap gains on crypto are tax free according to an announcement by the Tax department. Neither mentioned pending legislation. However, I will be in Portugal this year and it is unlikely to be retroactive.
@@thecryptostrategist2433 You're welcome. No, as far as we know there's no pending legislation but it's something that people are predicting. No capital gains on crypro is a huge incentive for traders to move here, but then again Portuguese could face pressure from other EU countries if they're taxiing it and PT isn't.
@@ExpatsEverywhere Oh i have no doubt that traders are already taxable in Portugal, as it is their living. I'm not a trader. I mined all my personal BTC in 2013-4 and have held ETH since shortly after launch. I do have some cheap hot alts that are more short term holdings, but for me, short term means 6 months to a year. I don't think I have CGT concerns on token liquidations, but I do think that the interest earned from yield farming could be taxable. I will investigate further. Thanks.
I feel NHR is useless for US citizen. As it says, if its taxed in the other country mandated in the tax treaty the tax is exempted. But if its already taxed in the other country and there is tax treaty between US and Portugal, you will not be double taxed whether there is NHR or not. It might make some senses for citizens of other countries, but its useless for US citizen because US charge the same tax for its citizens no matter where they live.
It depends on if you're eligible for foreign earned income exemption or not. - Josh & Kalie
@@ExpatsEverywhere Thanks for the reply. How about capital gain? Instead of paying 0% to 20% tax in the States, you have to pay 28% flat rate tax, is that right? And is dividend only taxed in US according to the treaty, so its same before and after move for US citizen?
@@kursorken Kind of a late reply here, but US citizens don’t pay capital gains tax in Portugal. There is a new court ruling spring 2022 and it clarified that under the NHR, capital gains are exempt because they are taxable by the United States. The wording of the NHR legislation was misinterpreted in the past and the Portuguese tax authorities programmed their tax collection accordingly. This is supposed to be corrected according to an accountant firm we spoke today. Dividends, rental income and interest are not taxed in Portugal under the NHR. Capital gains also not, but this is pending. There is a recommendation to extend the filing deadline to allow for the correction of the collection process by the tax authorities. In case you are in Portugal it is important you find a reputable accountant firm who is on top of this. We spoke to an accountant who went by the old collection scheme and was ready to take 28% of capital gains tax from us. I thought this doesn’t make any sense and got another opinion.
@@tatianaschoenfield9819 - please share whom you are using to file your taxes.
Ele utiliza muito a palavra" Applicable" jajaja.
You know. 😅 - Josh & Kalie
Good vid!
It cleared something that I couldn't figure out by myself（ ＾ω＾）whoa～
Glad it helped! Thanks for the comment. - Josh & Kalie
Good morning, by adhering to the NHR tax regime, is it possible to enjoy the exemption of capital gains from financial gains (professional trader) as a natural person by operating with a broker outside Portuguese territory? Or is it necessary to open a company to trade in another country, such as in territorial tax states like panama ..? Thanks so much, great videos !
Hey Stefano, thanks for the comment. It's probably best to contact a tax specialist about these kinds of questions because everyone's situation is different. Do you want some recommendations? - Josh & Kalie
come prepared, american friends. that way your journey will be more enjoyable and less shaken by unexpectation.
Good advice...not just for American's but all foreigners.😁 - Josh & Kalie
Do they not have tax allowances for capital gains like in the UK? Straight off 28% of my gains stolen is hard to swallow 😢
Why did I have to fall for a Portuguese woman 😅
I find this totally confusing. No help at all.
Bitcoin
For those of us concerned about stock capital gains taxes if going with NHR (which seem to be up to 28%), I found this recent article of a court case which seems to suggest they are no longer taxed if already taxed in the US for example... search term-> us-citizens-and-portuguese-nhr-tax-regime-saved-by-the-savings-clause