Contracting income solutions Portugal Contracting income solutions Portugal
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  1. #1

    Nervous Newbie


    Join Date
    May 2010
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    3

    Default Contracting income solutions Portugal

    Does anyone have any experience of contracting in Portugal? If so, how did you pay yourself whilst there?

    I'm going to be offered a 12-18 month contract there, and will resident in Portugal during the contract. I've seen some umbrella companies offer standard PAYE packages, but that's the least attractive option and from what I can see with fees and PAYE taxes, and not many deductions I could end up paying 40% of my gross in fees/taxes/social security.

    Any other options to maximize my nett take home?

  2. #2

    Godlike


    Join Date
    Jul 2005
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    Somerset
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    5,451

    Default

    Probably no help whatsoever but when I was in Portugal I was never resident (officially, I may well have been technically). I was invoicing the client direct from the UK and they up, however there is a 10% withholding tax - this is reclaimable against uk taxes provided you get a certificate from the ministry.

    I also had a support contract which was billed from the UK and paid less 10% (possibly erroneously since there was no element of personal service provided in Portugal but it was easier just to offset than argue about it).

    At this time, a few years ago, it was proposed that all services provided in Portugal would be subject to this withholding rather than it just applying to non Portuguese entities.

    I understand that there have been quite a lot of change in the tax regime in Portugal in recent years, these might provide some useful background as to how it might apply to you. It used to be the case that being a foreigner in Portugal and resident there and working for an entity in Madeira could be effective but probably isn't any more.

    The new Portuguese tax regime for non-habitual residents
    http://www.pkf.com/media/135566/port...ide%202010.pdf
    Portuguese residency and tax laws. Tax advice from Homes Overseas

    A lot of the changes have arisen due to property ownership by non Portuguese and operating the rental etc from outside Portugal.

    If you do end up on PAYE equivalent then you should still be able to opt to pay UK NI instead of Portuguese social security for some time which may be marginally beneficial.

    International - DWP

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