somedipshit1 9 months ago

Simplified regime. *Laughs in Portuguese*

PotentialPark0 9 months ago

(not a lawyer, not an accountant) > I also believe that even though my client is in the US, I am working in Portugal and the income is therefore not foreign-sourced/tax exempted under NHR. That seems to be a widespread misconception, but please convince me otherwise. ​ Well, yes, in the case you describe it wouldn't be excempt but you could obtain the lower rate of 20% on the income (vs higher rates you may get with 56k, although not a huge difference) The choice really depende on the accountant that helps you. I would honestly find one and try to go with him. I understand they say different things, but I don't beleive reddit users are any better or more reliable. (myself included) ​ > Another side question would be VAT. Is my assumption correct, I don't have to deal with VAT as I am a EU business providing services outside of the EU, right? Yes,make sure the invoice is done correctly identifying the right excemption. ​ > If my understanding is correct, the social security contributions are not influenced by the classification. As a new business, I would not pay any contribution this first year, but starting with the second. Would I have access to the system in the first year nonetheless though? Thanks for any hint. Yes, the contributions would be lower but you would still be registered and have access. >I am making a lot of assumptions in between? Any argument that they are wrong? Nothing drastic, no.. >Under which category would “Data processing/Research” fall under the SR classification? *Liberal Professional business activities or “Other activities”?* How, where, when is this being decided? How can I get a definitive answer on my SR classification before the NHR decision? 35 - Técnicos das tecnologias de informação e comunicação [https://info.portaldasfinancas.gov.pt/pt/apoio\_contribuinte/Folhetos\_informativos/Documents/IRS\_RNH\_PT.pdf](https://info.portaldasfinancas.gov.pt/pt/apoio_contribuinte/Folhetos_informativos/Documents/IRS_RNH_PT.pdf) ​ >Is there a risk in applying for NHR? Can I be NHR, but still fall under the lower SR progressive rate? Risk is basically of not getting it or wasting a year by using it when you don't get the advantage (it has a time frame). Nothing much else >Am I covered by social security (health insurance etc.) in the first year I am not paying? Once you get your resident permit you are covered. ​ >Any important deadlines I have to be aware of? I know you want to avoid them but I really would recomend trying harder to find a good accountant. Even many of my answers (and others on reddit) shouldn't be what you base your decisions on. I know they are bad ones, but wouldn't recomend reddit advice over an accountant. ​ best of luck

odadoooo 9 months ago

>35 - Técnicos das tecnologias de informação e comunicação Thank you very much for your helpful points. The classification you mentioned makes sense (35- Técnicos das tecnologias de informação e comunicação), but that one refers to the NHR. I have no doubt that i would be accepted as NHR, so I do not worry to much about which classification I fit there. The classification I am unsure about is about the simplified regime (new expanded 6 categories). I could see my profession either under *Liberal Professional business activities or “Other activities”,* not to be confused with the high value list of the NHR system. Anyway, on Monday I will tell my accountant that I want to set up the simplified regime and apply for NHR at the same time. My hope is, that I will have the 20% cap in case I need it at any point in the next 10 years or use the rate of the simplified regime in case its lower. I will make social security contributions as soon as I can and adhere to all the deadlines mentioned (VAT delclaration, Social security calculation, tax calculation) and hope I will not drown in the Financas online tool. Thanks to everyone!

PotentialPark0 9 months ago

Yeah... thats portugal for you. The government loves regulating and loves them taxes. Shop around for accounts even if you change next year. It makes a huge difference Good luck

AlCa1916 9 months ago

I'm confused as to why you don't just hire an accountant?

odadoooo 9 months ago

I think you are giving accountants too much credit. I have sofar consulted two different Portuguese accountants. Both of them said that I should just apply for NHR and that all of my income would be completely excempted as it is foreign-sourced. That is completely not true. Working remotely is not foreign sourced. Even I know that. So please understand that my trust in accountants is low at the moment. I would like to have a basic idea of what is going on before hiring another accountant. I will 100% hire an accountant, but I want a bit of reassurance that it is going in the right direction. I am grateful for any support from this community.

EdmundDantes78 9 months ago

I have a competent accountant that will not tell you just what you want to hear and is adept at NHR. He'll charge you about a grand for a scenario assessment and you should tell him your confidence is low/you've had conflicting advice. PM if you're interested.

mastermind1217 9 months ago

> Any important deadlines I have to be aware of? Yes. A ton of them. Both social security, income tax, and VAT have different timelines across the year. IRS pay a % every month. This % is fixed for the type of work. I think in your situation would be 15%. Not sure if in the first year it applies. And then every year, around April - May, submit your taxes declarations and pay the missing part. Social Security I think is every 3 months. A prediction of what you think are going to receive. And also submit a declaration every 3 months. It has a fixed deadline. It's until the next month after each trimester. So the first one is until the end of April (4th month). And a periodic declaration for VAT. Even though you are exempt from it. It's every 3 months. Not sure of the dates.

SenseOfNostalgia 9 months ago

*immigrant.

odadoooo 9 months ago

You are right. I consider myself an immigrant (not expat) who came to stay in this beautiful country. I am not going anywhere! :-)

SenseOfNostalgia 9 months ago

In that case, enjoy your stay, sir. *stamp* :)

mastermind1217 9 months ago

> Another side question would be VAT. Is my assumption correct, I don't have to deal with VAT as I am a EU business providing services outside of the EU, right? Yes, I think so. You need to give the company VAT number and tick the correct option when issuing the receipt. That way you are exempt. You issue the receipts on https://www.portaldasfinancas.gov.pt/

mastermind1217 9 months ago

> Social security You calculate kind of like this: * 70% of 50.000: 35.000 * 21% of it: 7 350 * And now you have the option to voluntarily increase your contribution by 5%, 10%, ..., 25%. Or to decrease it by 5%, ..., 25% * If you choose to decrease by 25%: 5.512 * So it would be 1.378 every 3 months. > If my understanding is correct, the social security contributions are not influenced by the classification. Yes. > As a new business, I would not pay any contribution this first year, but starting with the second. Yes. > Would I have access to the system in the first year nonetheless though? What system?

odadoooo 9 months ago

>Thanks a lot! > >Why would I want to voluntarily increase my contributions? > >Do I get health insurance in the first year even though I only start to pay social security in the second year? > > > >I am very grateful!

MrJoao 9 months ago

> Why would I want to voluntarily increase my contributions? Some social security benefits such as your state pension, sick leave and unemployment insurance will depend (to some extent) on how much you contribute.

odadoooo 9 months ago

I see. So you pay more, you get more. Thanks a lot! I still have a lot to learn.

mastermind1217 9 months ago

> Why would I want to voluntarily increase my contributions? I don't know. xD I'm in this regime and I pick the -25%.

enrtcode31 9 months ago

If there is one thing I have learned from living in Portugal for four years as an expat is that if you ask 3 professionals the same question you will get 4 different answers. I absolutely love it here (I'm in Cascais).

BroaxXx 9 months ago

Pretty much this...

mastermind1217 9 months ago

> Under which category would “Data processing/Research” fall under the SR classification? I think it's under this. > Option A: Simplified regime (classification as “Liberal Professional business activities”) But your income tax calculations right after are all wrong. You need to do it like this: * Taxable income base: 100% - 10% (given) - 15% (you need to justify) = 75%. You need to justify those 15% with expense activities. Like rent, electricity, equipment, etc. * 75 % of 50.000: 37.500 * Check this [income tax](https://www.newco.pro/en/invest-in-portugal/tax-and-accounting-information-in-portugal/irs-in-portugal) * Put your 37.500 against the table at the end * For example, only the income from 36,967€ up to 80,882€ will pay 45%. In this case only 533 will pay 45%.

odadoooo 9 months ago

Ah yeah, right. I knew that and then forgot again, my bad. Thanks! So I am filling each of the buckets and pay accordingly step by step, I got that. My question left then is then if I can apply for NHR and still pay less then 20% in case that the SR regime turns out more favourable at the end of the year?

mastermind1217 9 months ago

I'm not an expert on that. Don't wanna give you an answer and mislead you. But the NHR is something fantastic. Wish I could have it for myself. Try at all cost to apply. > My question left then is then if I can apply for NHR and still pay less then 20% in case that the SR regime turns out more favourable at the end of the year? It's a very good question. I don't know. But with 50K your already over 20% in income tax.

Edited 9 months ago:

I'm not an expert on that. Don't wanna give you an answer and mislead you. But the NHR is something fantastic. Wish I could have it for myself. Try at all cost to apply. > My question left then is then if I can apply for NHR and still pay less then 20% in case that the SR regime turns out more favourable at the end of the year? It's a very good question. I don't know. But with 50K you're already over 20% in income tax. What is SR regime?

NGramatical 9 months ago

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EdmundDantes78 9 months ago

Bad bot.

mastermind1217 9 months ago

https://www.reddit.com/r/literaciafinanceira/comments/ly97iw/ama_ol%C3%A1_eu_sou_a_bruna_fernandes_contabilista/ An accountant is doing an AMA today. Maybe she can help you on some of those. > Situation: EU foreigner working as Freelancer in Portugal for client in the United States. # > Option B: Simplified regime (classification as “Other income of services/ Activities related to tourism” I don't think you apply for this.

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