Paying TAXES in Portugal | What We Did & What You Should Avoid

[@debbie757]

Thanks!

[@ExpatsEverywhere]

Thank you, Debbie! - Josh & Kalie

[@moward301]

This information is GOLD!!! Thank you so much for sharing! As always, great job! Thank you!👍🏾

[@ExpatsEverywhere]

You are so welcome! Thanks, Mo! 💪 - Josh & Kalie

[@tjclairmont1]

My wife and I are following you and REALLY appreciate these videos. We'll be visiting in Dec to get a look around and do some personal research. We'll need some consulting time in the future and will look you up. The weather is nice in Virginia but the US is in a downward spiral and we don't want to get sucked down the drain.

[@ExpatsEverywhere]

Thanks for the message, TJ. We appreciate hearing that. Reach out to [e-mail] whenever you're ready. I (Josh) am a Virginia boy and I can attest to the nice weather although I will say that Porto is nice too. It doesn't have the lows or highs of Southwest VA weather year round. It's grayer but not as cold or snowy. Take care and all the best. Keep us posted. - Josh & Kalie

[@paulogarciadesousa]

A friendly piece of advice to everyone: Remember to ask for a proper invoice with your NIF on it, even for purchases such as a couple of espressos with pastéis de nata. And regularly log onto your AT profile to validate those invoices. And why bother, you ask? Because you can deduct 15% of the VAT you paid on each invoice, up to 250€ per each taxable category (there’s more than one, such as “common commodities,” “hospitality industry,” “veterinarians,” “healthcare industry,” etc.). True story: I was able to shave 500€ off of what I owed in 2021 taxes. Trust me: It’s easy; it works.

[@tatianaschoenfield9819]

Does one have to track it and submit the amount (with invoices) paid to the irs or does it happen automatically when we are invoiced with NIF?

[@ppietrap3876]

@@tatianaschoenfield9819 it should be automatic, at least it is the obligation of the business to keep their accounting in order and attach your NIF to the purchase. However with some small businesses it can take longer for them to fill all the information regarding the purchase.

[@paulogarciadesousa]

@@tatianaschoenfield9819 , it’s automated. One just has to manually validate the automated information and click on a couple of options that assign the invoice in question to one’s professional activity, partly or in full (or not at all).

[@zzzaaalll]

where do you check all the invoices where u gave nif in shops ?

[@SHABSOL]

​@Paulo de Sousa Can you please share where can we validate the invoices inside AT portal?

[@stevestarnes9198]

I know everyone's tax situation is different, but I have been told by several sources (including accountants and financial advisors) that you should have your Portuguese taxes prepared first, get the automatic extension as a US citizen living abroad until June, then file your US taxes. Have your US tax preparer be familiar with the Portuguese tax treaty so you don't get double taxed, and they you can also get tax credits for what you already paid in Portugal. But as with all tax advice, get it from an accountant or tax attorney, and not from people who may be in a very different place, financially.

[@ppietrap3876]

I think that for that to work people would need to file their portuguese taxes in April, because it can take several weeks until you receive the portuguese tax invoice.

[@hopoutside]

I was thinking the same thing, else the U.S. preparer won’t know the $ amt of tax paid to Portugal, for the Foreign Income Exclusion credit toward the U.S. tax paid amount. Doing it the way presented in this vid, would need to do an amendment for the U.S. tax return to get the FIEC applied (to avoid double tax).

[@shanash1]

Depending on what you do-if you’re working as a self-employed person-the sole trader status and filing is USUALLY a better deal than NHR. I have NHR status, but as a writer/consultant (not making much money) I pay about 8% and I pay into the SS system here, but, I will no longer pay into the SS system in the states (per the tax treaty). NHR is advantageous for those who live on dividend income, retirement benefits, rental income (considered passive), or have a foreign (US) corp and take dividends instead of a paycheck. This is definitely one of the most stressful parts of living here, but once you get into the flow, it’s not to bad! :)

[@ExpatsEverywhere]

That's right and a specialist can set people up to be the most tax efficient and within the law. We're definitely looking at going to corp route. We did not like our tax situation on the US side. - Josh & Kalie

[@erinjrock]

What about w2 us employee?

[@tomseyes]

If you live in Portugal and work as an independent/contractor and earn over 20k Euro p/year the best thing and easiest thing to do is open an activity with Finanças, do green receipts (standard self-employed in PT) and also register for the NHR scheme so you can benefit from paying a flat rate of 20%. If you earn less than 20k Euros per year you have no need to be on the NHR scheme unless you are retired with a pension or you have a company that operates in another country that pays you dividends because the the PT tax rates will automatically be less if you earn under 20k Euros. That said, your line of work as an independent would still need to fall into a high value category defined within the NHR scheme. To my surprise though, when they do the end of year calculation and take into account expenses through out the year my effective tax was more like 12.5% of my gross income - so very happy with that! That doesn't include SS which has an effective rate of 15% for a self-employed person in PT after calculations, but you don't pay anything in the first year of your activity so that's nice. So all in once you are in your 2nd year of activity and on NHR for both tax and SS im paying less than 30% of my gross income on modest yearly earnings, I save 35% each month which means I even get a nice savings pot at the end of year which is a bonus. Plus being VAT registered in Portugal when you earn over 10k Euros means you get VAT back on all purchases relating to your activity and have expensed through e-fatura with your NIF. And if you have overseas clients you don't charge them VAT on invoices (you do the reverse charge procedure) so they never pay VAT on your invoices and you never need to pass it on to the state - but you benefit from being VAT registered and claiming VAT back on purchases! Win win win. And for UK contractors who would overwise fall into IR35 on their contracts if working from the UK, well if you are not a UK resident than IR35 does not apply to you.

[@AliHaider55]

Hi Tom, I am a freelancer (I work at UpWork). got my residency card this year... can we have a chat? I am getting mixed information from the web and am very confused with all the information I got. can you help me with answering a few questions about NHR and tax systems? Thank you

[@nGons]

@@AliHaider55 Same. We're in the same boat. Did you get your questions answered?

[@Hello_PE]

Great information to know, thank you! I had no idea it was quite so complicated. Glad you got everything done (and as a fellow procrastinator, this was very relatable!).

[@ExpatsEverywhere]

Hey Prinyanka. It's not really that complicated. Sorry it came off that way. The reality is if you get a tax specialist on both sides (PT and USA), then they can guide you and it's a matter of getting them the correct paperwork and letting them fill in the correct boxes...at least for your first year. - Josh & Kalie

[@Hello_PE]

@@ExpatsEverywhere Thank you!

[@Yasin_Affandi]

Thanks for sharing this video n for sharing your experience with fulfilling d taxes in Portugal.

[@Yasin_Affandi]

Time flies when u r having fun n time also flies when u procrastinate, hehehe.

[@ExpatsEverywhere]

🤣 Indeed time does fly. We're 2/3s of the way through this year. - Josh & Kalie

[@Yasin_Affandi]

@@ExpatsEverywhere 😁

[@wisnomjr]

You two are amazing. And I say that with respect. Your videos are so helpful. I am using the same Tax Man that you recommended.Stephen is great, and I’m so happy I found him, because of your video. Keep it up! We love you.

[@ExpatsEverywhere]

Hey, man! Thank you very much again. We're happy to read your feedback here. Stephen did us a real solid, which we actually talk about on our most recent podcast episode. We needed to rush to get our taxes done to finish our mortgage application for the property loan here in Portugal and Stephen and his team expedited our stuff. Thanks for the love! We send love back. - Josh & Kalie

[@miamijames]

Could you please his info. I am looking for someone that knows the Nhra.

[@BrMg01]

2.02 you killed it man! what a move ( reminds me of parkour office scene ) :) love your videos!

[@ExpatsEverywhere]

Thank you. We were channeling our inner Casey Neistat but I should have had my glasses. 🤣 😎 Thanks for the love. - Josh & Kalie

[@BrMg01]

@@ExpatsEverywhere hahahahaha love it! 😂

[@jetfowl]

NHR is a 10% tax rate, not 20%. (or did that change again?) Also, it's really important to read the Dual-Tax Agreement between your original country and Portugal (like the US-Portugal DTA). It's not a very long document to read and it's broken up into sections, so you can focus in on what affects you.

[@ppietrap3876]

10% for retirees, 20% for people with income from high value jobs.

[@ExpatsEverywhere]

It changed in 2020. A lot of what's covered in NHR is 20% but again speak to a tax specialist for planning your income. In fact, speak to a couple. - Josh & Kalie

[@alvaropachecosilva]

10% is for pensions only. Other income is 20%.

[@JanetPerrenod]

Hi Kalie and Josh: Regarding paying taxes in Portugal, do we have to pay the taxes through our bank, or do we have to go through the Finance Portal of Portugal? We live in California but have an AL activity in Porto and have to pay taxes in PT as well. Any help is really appreciated as we are just trying to understand the process in PT. We really enjoy your videos and have visited some of the places you recommended as well. Thank you so much! Jan and George

[@ExpatsEverywhere]

Hi Jan and George, we paid from our Portuguese bank account to the account details provided on the tax invoice. On the actual invoice it tells you "where" to pay. Does that make sense? If you have any other questions, feel free to write Kalie at [e-mail] and we wish you the best. 😁 Thanks for following our content. - Josh & Kalie

[@jesustarifa3518]

Thanks for the helpful video!

[@ExpatsEverywhere]

Glad it was helpful! - Josh & Kalie

[@cookmaster3626]

Great Video. I am always a late Tax filer with Extension and do my taxes before the Extension dead line in October. If Portugal requires filing by June 30, and that should include the US filing, then it requires that US filing be made promptly w/out extension.

[@theresewheeler1498]

Geez what a nightmare … do you pay taxes for Portugal and US

[@cookmaster3626]

@@theresewheeler1498 - I am not in Portugal yet. Considering a D7 visa. My late filings with extension in US is because i have an income from another country and this 3rd country would make it even more complicated. I have been considering now instead of a D7 using the Schengen Visa 90/180 day rule to split the time between Schengen and non Schengen zone so dont have to deal with a 3rd country tax regimen.

[@ExpatsEverywhere]

Thank you, cook master. We filed with an extension because April 15 is the normal tax day and we really got the ball rolling late May through June. - Josh & Kalie

[@ExpatsEverywhere]

We need to but our US taxes on personal income were pretty minimal and most of it was business related. - Josh & Kalie

[@tebbywafer1665]

Here is a tax question I have not seen any of you in Portugal answer. How does Portugal treat my Tax-differed and Tax-free account from the U.S. (Ira, 401k, Roth Ira)? I saw your tax series and I did not hear that question. Thank you

[@ExpatsEverywhere]

Would you like to speak to a tax specialist? We can refer you to some. Email me at [e-mail] - Josh & Kalie

[@BMAC5306]

Does the Tax Treaty disallow being taxed twice on capital income? For example, 28% in Portugal vs 20% in the US. I enjoy your videos and will be moving to Portugal in 2025.

[@ExpatsEverywhere]

It's really best to check your specific situation with someone that understand the tax nuances between the US and PT as well as someone that knows the tax treaty. Thanks for watching our content. - Josh & Kalie

[@nguyenguy19]

Can you ask the lawyer on the 2022 court ruling that equity/stocks capital gains if taxes by US is exempt from Portugal taxes? Hope it set a precedent that others will enforce to avoid double taxation.

[@ElwoodPDowd-ed7pc]

Congratulations you guys! Nice to make the effort and feel the satisfaction at the end. Off to another fiscal year, yes?

[@ExpatsEverywhere]

Thank you, Elwood! 😁 Yes and yes. Off to another fiscal year where we'll be better prepared. - Josh & Kalie

[@anadossantos1429]

Yeah 👍 got it done 😊

[@PaulaDreyfuss]

Hi guys. Can you share Mathilde’s information? I just found out I have to file an amended return because my Portuguese accountant screwed up.

[@ExpatsEverywhere]

Hi, could you email Kalie at [e-mail] and she can give you recommendations on a couple options. - Josh & Kalie

[@dzidmail]

2:40 I just file the tax even though my address is not properly registered with financas as a rental.

[@ExpatsEverywhere]

All the best. - Josh & Kalie

[@JenShea]

Excellent info! Super helpful. Note to self: Do Not Procrastinate!! Wish I had a video on how it works for Canadians… 😉

[@ExpatsEverywhere]

Hey Jen, we thought you've had a tax year here in Portugal, no? Thanks for watching and leaving a comment! - Josh & Kalie

[@JenShea]

@@ExpatsEverywhere not yet!!! :)

[@pensionnewschannel5176]

Shalom guys. Welcome to PT

[@droops63]

That's actually really helpful. I had wondered if the tax accountants in the U.S. and Portugal would have to talk. I assumed that they did not, both sides just did their thing. Also, I'm curious as to why you didn't know what you owed. Obviously we know when we file in the U.S. I take it that that's not the case in Portugal?

[@ppietrap3876]

The system to file taxes is actually quite simple and effective for most people. Many can easily do it by themselves with many categories already automatically filled by the system online, and in the end it says the amount of tax - since in these cases people have already been paying taxes throughout the year it will also say the amount of money that they will get back or the extra they still have to pay to fulfil their obligations. If on the other hand you haven’t been paying taxes and have a more documents to file, I think what you get is just an estimate. You will have to wait for a confirmation that everything that was filed was accepted and correct.

[@GazilionPT]

The online system for filing your taxes has a simulator that is spot on for most people, but it is not perfected for less common situations. I think NHR is one of those situations.

[@ExpatsEverywhere]

Thanks, John. We asked them if it would be easier to connect the two. Matilde needed clarification on some things (income sources). The reason that we weren't 100% sure is because Matilde didn't know how the PT government would choose to treat a couple of the income sources, but moving forward we're going to assume that they'll treat it like they did for our 2021 filing so for our 2022 filing, we think she'll have a number for us. - Josh & Kalie

[@ExpatsEverywhere]

@ppietra p That's exactly what we're led to believe. We think that 2022 will be easier, faster, and more accurate. - Josh & Kalie

[@ppietrap3876]

@@ExpatsEverywhere pardon my curiosity, how many weeks did it take for them to send the invoice? Under normal circumstances it would take something close to 3 weeks after submitting.

[@SWHulse]

Great video and very informative. We just had our SEF appointment on August 18 so does our fiscal year begin on that date?

[@VanyBunny2010]

Hey - thanks for the video :) I am sorry if I missed it but did you have to move in the end or was it OK that your apartment wasn't registered?

[@ExpatsEverywhere]

You're welcome. We stayed. The owner registered the apartment. - Josh & Kalie

[@terrisokolow7796]

Glad you got the taxes completed!

[@ExpatsEverywhere]

Us too! - Josh & Kalie

[@GabrielAlvarez-y5v]

Great content! I got my NIF on september 2022 thru a representative, got my portugal visa approved on dec 2022 and then I landed on Portugal on jan 2023. My visa expired some weeks ago when I went to my SEF appointment for residency. Should I wait until I get residecy approved to request the NHR status?

[@BasicBeachCommunity1]

Doesn't their tax rate include health care as well??? So basically in the States you pay separate for everything.

[@ninarosaphotography2039]

Thanks for the info

[@ExpatsEverywhere]

You're welcome. - Josh & Kalie

[@ninarosaphotography2039]

@@ExpatsEverywhere 🥰

[@WrldExplorer]

Hey everywhere expats. I know you said that pensions are taxed at 10%. Does it depend on Private pensions or government pensions?

[@ExpatsEverywhere]

This is where it can get sticky because we've heard that government pensions might still be taxed in the home country and then get taxed at 10% here. It's probably best to talk to a specialist. - Josh & Kalie

[@TheAshoka2009]

What is NIF? How and for what?

[@ExpatsEverywhere]

Think of a NIF like a Tax ID number. You need it to live in Portugal, to do anything financial (get a bank account, buy a house, get a loan...). The easiest way to get it right now is to have a company obtain it on your behalf. We recommend a company called Bordr.io for it. Here's a discount link they gave us for our audience. www.bordr.io/?via=expatseverywhere - Josh & Kalie

[@layla8647]

Boy two residences & paying two taxes sounds like a nightmare 😬. Good thing u two have each other. If u only have USA income source, do u still pay Portugal 🇵🇹 taxes just for been a resident there? If yes, WHY?

[@pauladosch7062]

Portugal taxes residents on their worldwide income. Residence based taxation is a very common system. Territorial tax is less common, only a few countries, and you only pay taxes if you work in the country. The US is a citizenship based tax system that is very rare, only 1 other country uses this system, Eritrea. There is advocacy to tax US expats like residence based taxation pending before Congress and the courts. The US tax situation for expats gets extra complicated because of FBAR and FATCA.

[@ExpatsEverywhere]

Hey, Layla. It's really not that bad but it's also the price you pay to play the game. Yes, we do pay PT taxes but we don't get double taxed on the same income. - Josh & Kalie

[@WhyYouTrippin]

Is KZbin AdSense income taxed under the NHR Regime at 20%? Or is it not taxed because it's considered foreign royalties?

[@ExpatsEverywhere]

In our case because ExpatsEverywhere KZbin channel is a part of a registered business (State of TN) that is ExpatsEverywhere LLC, it's taxed in the US. We pay ourselves a salary. We're looking at changing our business structure and going the Corp route. - Josh

[@TheAshoka2009]

Nif portal where to get it?

[@ExpatsEverywhere]

The NIF portal is where you can login to view different things tied to your NIF but first you need a NIF. - Josh & Kalie

[@cmdv42]

what %?

[@ExpatsEverywhere]

Our % and your % would surely be different because of income sources and amount of income so the % wouldn't be helpful to know. - Josh & Kalie

[@Uwandreduplooy]

Thanks for the information! Could you possibly share the company/persons information that you guys use for your taxes in Port? I had a look at your video on Taxes from a year ago and seems like you are using someone else now? TIA

[@ExpatsEverywhere]

Hey, shoot us and email and we can do that. [e-mail] - Josh & Kalie

[@marcosdebrito2028]

We are moving to Portugal: We have a small pension from USA and income from a few rental apartments, We are confused about the tax that we are going to need to pay here in the USA and in Portugal, Could you please explain it to us? Thank you so much,.

[@ginasmith2484]

Good Video

[@ExpatsEverywhere]

Glad you enjoyed. - Josh & Kalie

[@sandrasingh4963]

Please could me the name of the health insurance broker

[@ExpatsEverywhere]

Hi Sandra, email Kalie at [e-mail] and we'll get you a few links and info. - Josh & Kalie

[@sandrasingh4963]

I love your videos. I am on D7 visa. Not working in Portugal. Do I have to pay tax.

[@teriw5726]

Y’all stressing me out 🤣

[@ExpatsEverywhere]

We were stressed out. 2022 will be different. Famous last words we know but seriously, it'll be different. - Josh & Kalie

[@kilgary]

Your stills says “We Paid This” but then you don’t say what you paid. Was it indeed 20%? 20% of what income? The KZbin channel work? Wasn’t that already taxed in the US?

[@ExpatsEverywhere]

It's true though, we paid that little envelope right there. That was the "bill" we paid. We didn't say, this is HOW MUCH we paid. 😁 The vast majority of what got taxed was Kalie's 1099 job. - Josh & Kalie

[@Carolinapetroska]

The postal delivery mail system is really inefficient. I keep on receiving previous tenants' mail. I even took the time to write on the envelop that those people don't live here anymore but those stupid employees keep on delivering their mail to me. so now not knowing what to do with all this mail. I just throw it in the garbage. Hey after all it's not my fault if the previous tenants didn't do their change of address after 2 years and if they don't want to pay their bills......

[@leoliral]

Can you share Matilde’s contact ? I already done the US taxes and need an accountant in Portugal that understands de process… Thank you in advance

[@DiogoF.]

Last day today to pay your IRS. 🇵🇹

[@ExpatsEverywhere]

That's right! - Josh & Kalie

[@Khan-xo8yp]

OK send me soon

[@rafaelmarques5118]

The Gold Visas ended.

[@pures1n]

do you have to pay taxes on your US rental units in Portugal? Also what about Crypto and dividends?

[@ExpatsEverywhere]

We didn't personally but that doesn't mean that the same will go for everyone. There are write-offs and deductions that take place as you know. It's best to consult a tax specialist and go over your numbers with them. Let me know if you'd like us to refer you to someone. Email me at [e-mail] - Josh & Kalie

[@cal9112]

So you file for taxes in the country you live and double taxed in the States too? Great country, no health care, no safety net, no safety in the streets,... Great country!!

[@isaacamrani966]

Sorry,but I prefer to hear Josh speak…, the voice and accent of Kalie is a bit hard to understand , Get my apologies

[@ExpatsEverywhere]

I feel you, man. - Josh

[@minihelpconsult]

Why you guys don't have a lawyer??

[@SirJackOcean]

Thanks!

[@ExpatsEverywhere]

Thanks for the channel support, Jack! - Josh & Kalie

[@janeschmitz9350]

Thanks!

[@ExpatsEverywhere]

Thank you very much for the channel support, Jane. - Josh & Kalie

[@wisnomjr]

Thanks!

[@ExpatsEverywhere]

Hey, Jeffrey! Thank you very much for the channel support. We really appreciate it and it goes a long way when viewers do this. Cheers! - Josh & Kalie

[@HelderP1337]

Thank you!