Contracting with portugese companies

[gravesendboy]

I have been offered a contract with a portugese company but to get paid without deductions apparently I have to fill something in 12 rfi
Has anyone here dealt with something like this
I would appreciate it if someone could point me in the right direction on where to get the form

Thanks

[ASB]

I have been offered a contract with a portugese company but to get paid without deductions apparently I have to fill something in 12 rfi
Has anyone here dealt with something like this
I would appreciate it if someone could point me in the right direction on where to get the form

Thanks

I assume it is your limited to the Portuguese Lda and you have no office in Portugal.

In this case:-

1) Your Portuguese clients fill out an estimate of the amounts your co will bill then in the fiscal year. This is then signed by them and sent to the Portuguese tax office. This is the form to which you refer.

2) You do nothing. In this case 15% will be deducted by the company as a withholding tax. You can offset this against UK Corporation Tax. [You should get a receipt from the Portuguese tax office to enable this to happen. I lost the will to live trying this]

Alternatively:-

Send your copies of the form to your UK tax office. With a letter saying "please tell these people we are a UK resident company and pay tax on our worldwide profits". Your taxman will then (should) write back certifying this and also stamping the form officially. You can return this to the client. They can now pay the invoices without deductions.

you going to be in Lisbon?

[gravesendboy]

Chees for that
I am due to be based in Lisbon and Coimbra
I'm still trying to weigh up the benefits of this and although the money is good ,I'm not really comfortable with the idea of 15% of my companys money being held back

[ASB]

Chees for that
I am due to be based in Lisbon and Coimbra
I'm still trying to weigh up the benefits of this and although the money is good ,I'm not really comfortable with the idea of 15% of my companys money being held back

In Lisbon if you are anywhere near Green Park the Marriott isn't bad for the money. You can (or at least could) get this to < 70 Euro including breakfast if you book it other than through the website. [I normally used to pay 69]. It's a bit in the middle of nowhere for going out on the lash but cabs are cheap once you get used to the rates that are supposed to apply.

Bill 100k
Cash paid 100k
Expenses 20k
Profit 80k
CT 15.2k

Or with withholding

Bill 100k
Cash paid 85k
Expenses 20k
Profit 80k
CT 15.2k
Less portuguese tax paid 15k
CT To pay 200

The question is whether if you get in a position where the withholding tax is > than the UK CT you can reclaim the excess (this would occur if your expenses were > about 21% of turnover). I never got into this position since work in Portugal was a fairly small part of turnover.

In any event, if you get the fiscal form from the clients and get your revenue office to stamp it they will not do the whole withholding thing anyway.


Edit: the form is "Claim for the Application of the Convention for the avoidance of double taxation - Mod 12 RFI". If you want to look at one try here:
http://www.dgci.min-financas.pt/pt/s...x_conventions/

[gravesendboy]

Thanks again for that and I have decided to accept and will be sending the next 3 months in Lisbon and Coimbra
I will let you know how the witholding tax progresses as I'm sure other contractors will come across this