This blog post is NOT tax advice and it’s intended to people that doesn’t already have their own company.
When you are first arriving in Portugal working for a foreign company in another country, maybe your home country then these questions start to arise.
First, we have to establish how you are earning your money, before we can establish what tax and social security.
- If you work for a company in another country lets for argument sake, say Sweden and you receive a payslip every month – then unless it’s a very rare circumstances then this is not allowed.
For this set up to be legal your employer would have to set up a Portuguese company and pay out a Portuguese Payroll. It’s unlikely your employer would do this. But if it’s the case you must:
– pay 20% tax for NHR approved activity.
– pay 11% social security
– your employer pays around 22% in social security.
If your employer doesn’t want to do this as it’s costly and complicated then we have to move on. - If you are working for foreign company that has an entity in Portugal and you receive a Portuguese salary, then you can follow the same example as in no 1.
- If this isn’t the case that makes you a freelancer that invoice your services to a foreign company.
First and foremost, we have to understand in this situation the entire tax liability falls on you.
Then you can follow self-employment on this calculator: https://mytaxes.pt/
You can consider setting up a company outside of Portugal, where you can pay yourself as dividends and accomplish better tax conditions. This can also be better if Portugal isn’t your end-station, and you want to be ready to move to another country.
For this I would recommend that you get proper international tax advice.
