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Portugal: Tax Residence in Portugal

Introduction

A person resident in Portugal is liable to Portuguese tax on worldwide income and, to some degree, tax on capital gains. A person not resident in Portugal is liable to income tax on his Portuguese source income, and to certain capital gains in respect of assets in Portugal.

The tax year

The Portuguese tax authorities (Finanças) treat any individual who spends more than 183 days in the tax year (1 January - 31 December) as a resident for Portuguese tax purposes. The 183 days do not have to be consecutive - this is a cumulative rule. You are then treated as tax resident from 1st January, but if you come from a country with a Double Tax Treaty you may be treated as being resident for only part of the year.

It is now accepted in Portugal that spouses can have different tax residence statuses. However, the spouse who is claiming to be non resident in Portugal must prove that s/he does not have the majority of their economical activities in Portugal. The non resident spouse will only be taxable on Portugal on any income arising in Portugal.

The spouse who is resident in Portugal will file a separate tax return reporting his/her worldwide income and his/her share of any joint worldwide income.

Permanent home

In addition if you have available a 'permanent home' in Portugal, as of 31 December you may be deemed to be resident of Portugal for tax purposes if it appears that you intend to keep and occupy it as your permanent home. Unusually, you will be deemed to be resident for tax purposes in Portugal if, on 31 December in any year, you are the member of a crew of an aircraft or ship registered in Portugal. If you are resident in a country with a suitable Double Tax Treaty with Portugal, such as the UK, then this particular rule can be ignored.

De Facto residence

Portuguese tax is levied according to de facto residence. This has nothing to do with citizenship, nationality or whether you have a permanent residence visa or work permit.


More pages

Page 1: Introduction
Page 2: Scope of taxes
Page 3: How the Revenue may attack your "Non-UK Residence"

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