FINANCE

QUESTIONS & ANSWERS

Each month, Ricardo Chaves of All Finance Matters gives an insight into the legalities governing tax and general financial matters

In 2020 many UK citizens have enquired about If you can get the income as salary and it’s from an high the Non Habitual Residency in Portugal and also value activity, this income would be either free of tax if about the possibility of relocating here prior to you pay any tax at source, or taxed at 20%, if not taxed at Brexit. Below you can find the most common source. This is a privilege of the NHR status, that you can questions we have received. take advantage of. Q. I am a UK citizen currently working from regime, that allow that you are taxed at a flat rate of 20% London but I am considering relocating and working on the earnings from this activity. from Portugal. Would you be able to advise us on the This applies to income from employment (category A) procedures required to establish NHR in Portugal? Are and income from self-employment (category B). there certain steps we need to take in a particular order, Please note that even if you remain on the payroll of before we complete the process? your current company, as the job is done in Portugal, the We certainly can guide you through the whole process. company may have to pay your SS here. If you are selfThe first step is to obtain the NIF (fiscal numbers) in employed the Social Security is also your responsibility, Portugal. As currently most of the tax offices are closed but you may have a one year exemption after registration. due to Covid19, you need to book an appointment with the tax authorities through the finance portal. If you Q After applying for NHR status must I change my prefer, we can do this on your behalf, as part of the driving license for a Portuguese license? process. To issue the NIFs you need to provide copy of Yes, after residency you should contact the relevant your id or passports and a utility bill or driving license, authorities, to either exchange your driving license to a with your current address. This will be from your foreign Portuguese one, or at least register your foreign driving address. license with the relevant authorities. Once you get the NIF’s the following step is to become resident, as you are EU citizen, you can get the residency Q Once I become resident in Portugal, how do I register through the local council. Once you have the EU residency with the National Health System? Do I need a private certificate, you then need to change the tax status, again medical insurance to live in Portugal? through the tax office and finally apply for the NHR status. The only requirement to obtain state health care in Q In terms of residency in Portugal, do I need to insurance. To be registered with the National Health purchase a property, or can I rent? How long a rental System, you should go to the health centre of your area would be required by the authorities in order to with your id, fiscal number and residency certificate. No establish our intention to stay long-term in Portugal inscription with the social security is required.

? We intend to stay long-term but wish to rent before Q I will continue to work from Portugal, to my current

There is a list of activities on the non-habitual residency Portugal is residency. You do not require private health

possibly buying. Q What happens to my residency permit after Brexit?

Providing is a registered rental contract (not Air BnB and You will be covered under the withdrawal agreement similar) the contract will allow you to obtain residency. if you live in Portugal prior to 1 January 2021 and Please note that to apply for the EU residency certificate, continue to do so afterwards. As Portugal has chosen a you need to be in the country for more than 90 days, prior declaratory system for residency, this means that in 2021 to applying for this document. UK nationals will be required to exchange their residency documentation for a biometric card. This biometric Q In your opinion, what is the latest date we could card will state the holder is covered by the Withdrawal arrive in Portugal to establish residence before any Agreement. Brexit deadline? If I am going to apply for NHR, by when UK nationals in Portugal are required to register for should I do it, before it’s too late? residency and have the appropriate documentation. The decision needs to be taken in the year that you take If you have not registered for residency prior to the end residency, as you will have until the end of March of the of December 2020, the EU country you reside in may following year to make the application. As the residency not consider you for it. However, Portugal have stated certificate needs to be applied after you been in the those that arrive prior to 1 January 2021 may register for country for 90 days, you really should be starting the residency under EU citizenship rules, until 30 June 2021. process no later than September. Those who arrive after the 31 December 2020 will have Concerning the rental contract, if the contract starts to apply for residency under the more stringent third in December, that should be enough to obtain the EU country national rules. Applying means it can be refused residency certificate prior to the end of 2020. whereas if all requirements are in place for EU residency it

is automatically given.

employer, what is the tax under the NHR rules on my Please feel free to send us the questions you may have to salary? ricardo@allfinance.pt. We will select some to be published.