At present, the application of double taxation and the possibilities of avoiding legal and economic disadvantages are governed by the rules of the Levy Code. Thus, two legal norms aimed at avoiding double taxation can be considered: first, national legislation and, second, international treaties ratified by Portugal. It is advisable to talk to our lawyers in Portugal and get legal help if you are starting a business in Portugal or if you are more familiar with the tax structure in that country. In international practice, there are three basic methods of eliminating double taxation: an important feature of the Portuguese NHR tax system is the relationship with double taxation treaties (DTAS). These make it possible to tax most categories of income in the country of origin. If your income comes from a country that has a double taxation agreement with Portugal, it is not taxed in Portugal. When offshoring, we need to consider all relevant aspects such as tax residency, double taxation treaties, financial emigration rules (if necessary) and details of investment restructuring. On the other hand, the exception to this mandatory rule is the situation in which the non-resident does not fulfil the conditions laid down in a bilateral agreement or where such an agreement does not exist, so that only the source State (in whose territory the income received is taxed) applies the internal tax policy to the income of non-residents operating in its territory. Based on European Union (EU) rules and bilateral social security agreements, an exemption from social security contributions may apply to extended business travellers. From the point of view of national tax legislation, alongside international tax legislation, it should be noted that the provisions agreed in bilateral tax treaties, in the event of a conflict, take precedence over the provisions of national law. The Convention for the avoidance of double taxation takes precedence over national law where a non-resident taxable person satisfies the application of the Convention.
In that case, the State of residence shall be exclusively responsible for the taxation of the resident`s income, including income received in the State in whose territory the taxable person operates as a non-resident. For more information on how to avoid double taxation, please contact our law firm in Portugal. There is no minimum threshold / number of days that exempts the worker from the obligations to deposit and pay taxes in Portugal with regard to Portuguese working days. However, the application of a double taxation convention may determine that the worker has no obligation to declare, provided that the person spends less than 183 days in Portugal and that the person`s income is not paid by a Portuguese unit or impute to a Portuguese unit Portuguese residents are subject to the taxation of their worldwide income at progressive marginal tax rates. and non-residents are subject to Portuguese tax on their Portuguese income at the rates in force (between 25 and 28%), depending on the type of income received. A double taxation convention may provide for a change in these rules. Portugal has signed double taxation treaties to date with: Algeria, Austria, Barbados, Belgium, Brazil, Bulgaria, Cape Verde, Canada, Chile, China, Colombia, Cuba, Cyprus, Denmark, Slovenia, Estonia, Finland, France, Germany, Greece, Guinea-Bissau, Netherlands, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, South Africa, Spain, United Arab Emirates, United States of America, Japan, Kuwait, Latvia, Lithuania, Luxembourg, Macao, Malta, Mexico, Morocco, Mozambique, Norway, Panama, Pakistan, Peru, Poland, Qatar, United Kingdom, Czech Republic, Republic of Moldova, Slovak Republic, Republic of Uruguay, Romania, Russia, Singapore, Sweden, Switzerland, Timor-Leste, Tunisia, Turkey, Ukraine, Venezuela. . . .