Not true, self-employment/salary is considered a local source, you will be taxed at 20% + social security if you have the NHR. There's other sources that are 0%, such as royalties and dividends.
this post was submitted on 29 Nov 2023
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This is true where I live in Costa Rica and true of most Latin American countries.
Portugal's Non-Habitual Resident (NHR) program does offer favorable tax conditions for certain types of foreign income, including from self-employment or a salary from a UK company, under specific conditions. It's true that Portugal has double taxation treaties that can make this possible. And on a side note, for digital nomads considering a move, using services like Rebookify for hotel stays can be a cost-effective way to explore different areas before settling down
foreign-sourced income
you don't understand what this means. if you are living in portugal, working from your laptop, that is locally sourced income. this does not refer to where the money comes from. realistic sources of foreign income is dividends/rental property. any kind of labour is not going to count
you don't understand what this means. if you are living in portugal, working from your laptop, that is locally sourced income.
To be fair. different countries use this claim differently.
But yes, it generally would be based on (with work from your laptop) where you were physically present when you did the work. That's the source.
Why is rent / dividends from another country foreign sourced income, but receiving payments from foreign companies wouldnt be? 🤔
Because it matters where the work is performed. In the case of rent or dividends, it's passive income so it's considered to be originating from the other country.
This is possible, in part, due to Portugal’s 71 double taxation treaties. According to the regime, as long as the source country of your income has the power to tax your income (regardless of whether or not they actually apply the tax), Portugal will not tax your foreign-sourced income
This is false. Just about all of it.
That isn't how these double taxation treaties work.
What it actually means is that if multiple countries can assess you for taxes, they both do at whatever the rate is and they get a dollar amount.
Then the most direct claim against your taxes (typically the one of the country you are physically present in when working) takes their tax.
then the second/others look at their number, and subtract the taxes you already pad to the first country. And now they take their tax if the number is still positive.
So, no, it has nothing to do with just "a country CAN tax your income", but SPECIFICALLY how much taxes they take.
Serious question: how would they even know?
Easy - Once you’re living there they’d just ask in any random audit. Are you gonna make up fake bank statements, fake invoices and fake everything during an investigation in a foreign country?
The thing about tax fraud is, it's tax fraud! All good until it very much isn't.
There's certainly indicators.
Like, for example, you being on a virtual work visa that requires showing proof of work, but then you try to say you made no money.
So, in SOME way, you're doing something that is against the rules.