
Ask HN: Working remotely in Portugal for an Irish company - donbeo
Hi, 
the Irish company I am working for offered me to work remotely.<p>I have heard that in Portugal it is possible to have a very good tax rate 20% with the NHR system.<p>I am a software engineer (Data Scientist).<p>How does the system work? Would I pay 20% on my gross salary?
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garyclarke27
If you become tax resident in Portugal, ie live here more than 183 days per
annum, you can pay zero tax for 10 years, if you source your income from UK
company you have shares in via Dividends. Not sure if Ireland is the same, but
probably is, assuming they have a double tax treaty with Portugal and no
withholding tax on dividends. I moved to Cascais nr Lisbon last summer because
of Brexit. Wonderful climate food beaches city, great infrastructure, ,
airport roads etc, cheap 200MBS Fibre, safe with v low crime rate, friendly
English speaking locals. Loads of expats moving here because of this tax,
property market is on fire. A few negtives, no Amazon, shops expensive for
Electrical goods Furniture type items. VAT 23%. Terrible dangerous incompetent
drivers, many crapy little dangerous cars because car tax is insane, shame
becuase they have great motorways. Bureaucracy not as bad as expected quite
easy to register with authorities, I paid our Estate Agent who found our house
to help, she was brilliant, better than the lawyer. Services like law and
accountancy v cheap here. €500k in property investment (home or several
apartments) gets you a golden visa so insurance for us, if UK crahes out of EU
without a deal. Also private medical insurance remarkably cheap full best
cover including dental for famaly of 4 well under €200 per month. Electricity
Gas v expensive though pool costs a lot to heat.

~~~
toomuchtodo
Would you have a link for more information on the €500k property investment
visa?

~~~
despacito
It's the golden visa program.
[http://www.sef.pt/portal/v10/en/aspx/apoiocliente/detalheApo...](http://www.sef.pt/portal/v10/en/aspx/apoiocliente/detalheApoio.aspx?fromIndex=0&id_Linha=6269)

Spain, Greece, Malta and few other countries have similar programs.

~~~
toomuchtodo
Thank you so much!

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sergiosgc
Your first step is to get registered with the Portuguese fiscal authority,
social security and health system. You'll have to do that in person, but from
then on interactions will all be online. Your best bet is to go to a "Loja do
Cidadão" (citizen's shop), where all services are in one place. There's a Loja
do Cidadão on major cities.

Then, you'll have a few options. If the remote company has no Portuguese
subsidiary, you'll have to operate as an independent contractor (trabalhador
independente) or as a one person company (sociedade unipessoal). It's
basically the same, except as a company you must have an accountant. As an
independent contractor you may have an accountant, or you may choose a
simplified accounting model where you don't declare expenses, and your profit
margin is estimated by the fiscal authority.

Income tax is progressive. You should be able to read the brackets here:
[https://economiafinancas.com/2017/escaloes-
irs-2018/](https://economiafinancas.com/2017/escaloes-irs-2018/)

You declare your income in May, and pay income tax in July/August.

Social security is a fixed rate: 29.6%. It is a mandatory retirement savings,
and provides disability income should you require it. You pay social security
quarterly or monthly.

Access to the national health service is not dependent on any tax or regular
payment. You don't need health insurance.

As an independent contractor, you would pay VAT, but cross-border transactions
are exempt, so your VAT is probably zero (check this with an accountant; EU's
rules on cross border transactions are in flux).

References:

[https://www.portaldocidadao.pt/](https://www.portaldocidadao.pt/)

[http://www.portaldasfinancas.gov.pt/](http://www.portaldasfinancas.gov.pt/)

~~~
mcjiggerlog
That's a pretty high social security rate. I am in a similar position to OP,
but in Spain. My overall tax burden (including social security) is around 30%
which is not bad at all. So, if you're flexible and just looking for something
new, I definitely recommend looking at Spain.

~~~
mdekkers
_I definitely recommend looking at Spain_

I'm in Catalonia, Spain (for a few more weeks) and do not recommend. I don't
know what you are making, but I am also an Autonomo, and I'm being royally
fucked on social insurance and taxes. My tax and SI bill for this year will be
around 60%, and fuck that. And yes, I have tried different accountants.
Essentially, the tax department decided that a lot of my expenses are not
allowable, and because I have bank accounts in other EU countries as well as
Spain, they decided that I am "probably hiding something" (their words). I can
go and spend a lot of money on lawyers, or I can just pack up and leave.

Combined with the bullshit Catalan independence movement and accompanying
social and economic instability, generally unfriendly Catalans, terrible
quality of food (essentially salt, with a hint of whatever it claims to be on
the package), and the "we will bill you whatever the fuck we want, good luck
clawing your money back" utilities (literally opened a 400 EUR bill from the
phone company 10 minutes ago), I am totally done with this place.

I have lived in many countries, and all places have challenges and ups and
downs. This place, however, is the pits.

~~~
ejanus
Head to Rwanda.

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fauigerzigerk
You are probably referring to the non-habitual residence scheme.

As far as I know, the 20% tax rate only applies to domestically sourced
income. Income from Ireland would be exempt from taxation in Portugal if it is
taxed in Ireland.

I'm not sure if and how this scheme affects your social security contributions
and eligibility for health care and pensions.

If you don't speak Portuguese well enough to really dig into this yourself, I
would suggest you get professional advice.

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eadan
This is a serendipitous discovery! I'm also a data scientist working for an
Irish company in the process of moving to Portugal. My email address is in my
HN profile if you want to talk.

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easytiger
Both are in the EU/EEC. You could simply move to Portugal, change nothing
about how you are remunerated, keep an irish Euro bank account and everything
should work fine surely.

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uxhack
The Portugese non-habituall-residence status has a reduced tax rate, or no tax
rate if the tax on the income had been paid elsewhere in a non-tax haven.

You can apply for it if you have been non-resident in Portugal for more than 5
years, and lasts for 10 years.

It does not apply to Social Security which in Portugal is very high.

It is very critical to structure everything in the right way otherwise you may
end paying more tax and Social security than you would in Ireland!

Getting the right advice is critical. I got the wrong advice and it took it
years to solve.

~~~
donbeo
Do you mean that in addition to the discounted taxation I should pay an extra
for the Social Security?

~~~
sergiosgc
Yes. NHR status affects your income tax, but not social security. It is pretty
much designed to attract retirees from other EU countries (and those are
almost non-affected by social security).

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pouta
Drop me an email at moura até oko dot ai. I am from Portugal and I am
available to answer any questions you have.

I've recently been in a similar situation with a company from Belgium.

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mtmail
Will you be an employee or a contractor?

~~~
donbeo
I do not know. We have not defined the formal contract yet. I guess we can
decide how to do that. At the moment I am an employee.

What would be the difference?

~~~
mtmail
Quite a difference. When you work in Portugal you need to pay the local income
taxes, but your company needs to pay the relevant local taxes as well (for
example half of your health insurance, depends on country). In order to do
that they need to be registered in Portugal (without a tax id you can't pay
taxes) which means opening a subsidiary. As you can see it asks a lot from the
company and they might not be willing to do that for one employee.

With European tax law, when you live and work in Portugal, still for any day
you work for your Irish employer in their Irish office you have to pay income
tax in Ireland (double taxation agreements between the countries). If it's
less than 5% of the work days per year it doesn't matter. If you have to go to
Ireland for whole weeks for meetings or training you might have to pay taxes
in both countries. Well file taxes in both countries for the percentage of
working days. Again the double taxation agreements between the countries
guarantee that you don't pay taxes twice (or if so you can claim the extra
amount back).

As contractor it's easier. You live and work in Portugal and pay local taxes.
Of course you need to register as sole trader or single-person company
(whatever the equivalent in Portugal is). Any trip to Ireland is simply a
business trip. It's both a cost and (ideally) you invoice that to your client
(the Irish company). Your salary needs to rise because now as a sole trader
you have additional cost (other insurances, slightly different taxes, you have
to pay for a computer yourself, you no longer have sick days and no longer get
paid for days not working e.g. holiday).

A third option is to find a Portuguese company (e.g. small agency) where you
become employee and they send invoices for the Irish company.

The company will likely try to get you to work as a contractor because it's an
easier setup. For you it's better to stay an employee, ideally get reimbursed
for any trips to Ireland, but you have to deal with filing taxes in both
countries.

~~~
roryrjb
All very true. I'm in a similar position, living and working in Portugal for a
UK company. Basically because it asks a lot of the company I am a contractor,
registered in Portugal, paying taxes, social security, etc. But because of the
greater burden on me and not on the company I negotiated a higher rate.

