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
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.