Foreign earnings necessitate tax disclosure
To steer clear of paying double taxation on earnings from abroad in Portugal, heed these counsel from the Tax and Customs Authority (AT) and tax specialists:
1. Collect Your Tax Residency Certificate- Importance: Crucial in capturing benefits under double taxation treaties (DTTs), this certificate confirms your Portuguese tax resident status.- Acquisition: Log onto the Finance Portal, sign in with your NIF (Tax Identification Number), hunt for "certidão," select "Residência Fiscal," and fill out the necessary fields. You'll receive your certificate digitally.
2. Take Advantage of Double Taxation Treaties (DTTs)- Intent: DTTs are international agreements that aim to prevent double taxation. Portugal has signed these agreements with numerous nations.- Advantages: These treaties often equip you with tax credits or exemptions on income taxed in another country, ensuring you're not levied twice on the same income.
3. Apply for Tax Credits- Functionality: If your income is taxed in both Portugal and another country, claim a tax credit in Portugal for the taxes you paid abroad, subject to the amount of tax owed in Portugal.- Procedure: This typically involves filing a tax return in Portugal, along with documentation of taxes paid abroad.
4. Explore Special Tax Regimes- IFICI Regime: Highly skilled individuals or those in specialized, high-demand sectors could benefit from the IFICI regime, which offers a flat 20% tax rate and exempts foreign income, including wages, pensions, rent, and dividends.- High-Net-Worth Individuals: This regime can significantly minimize tax obligations on foreign income.
5. Seek Guidance from Tax Specialists- Value: Addressing the intricacies of international taxation and the specific rules of DTTs and other tax regimes, consulting tax specialists can ensure you captivate all accessible tax benefits and avoid double taxation efficiently.
By adhering to these steps and consulting tax specialists, you can efficiently handle your international tax obligations and evade double taxation on earnings from abroad in Portugal.
In the pursuit of avoiding double taxation on earnings from abroad in Portugal, it's advisable to secure a Tax Residency Certificate by logging onto the Finance Portal, filling out the necessary fields using your NIF and selecting "Residência Fiscal" under "certidão" for digital delivery. Additionally, leveraging Double Taxation Treaties (DTTs) signed between Portugal and various nations can provide tax credits or exemptions on income taxed in another country, helping you avoid double taxation.
