NHR: Portugal Taxes for Americans Living Abroad

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ah taxes one thing that everyone dreads especially if you are living in a different country and you have to file taxes in two different countries since I have been living in Portugal I have been looking for an easier solution to be able to file my taxes and keep track of them between the United States and Portugal but to no avail I have not found anything except hiring an accountant in Portugal and hiring an accountant in the United States and hoping that they can communicate to make sure they get it right but finally I stumbled upon a new startup company called title that is doing exactly that and today I have the CEO of title who is going to answer all of the questions about filing your taxes anywhere in the world and corresponding with the US so without further Ado let's get Luke on here hey Luke are you there thank you for joining us today hey Dave thanks for having me I love your YouTube videos um I recently moved to Portugal and so it was very helpful to to just yeah to like learn about the Portuguese life um and the cities in Portugal ah well thank you so much I really appreciate the kind words you told me that you had started a taxes for expat business and why did you start that so I started title which is the business for the text business for expats because I have traveled a lot in my life and I've also worked in other places in my life um and so I noticed that it's it's very hard to find a good tax advice in a new country um and especially if you need tax advice from country a and you move to Country B and and these two countries have something to do with each other right so maybe you get income from country B but you live in country a when I went to tax advisors to get advice on this matter they usually point to each other without having the international expertise so it became quite complicated the costs were kind of unforeseen at the start and so it was it was just a yearly headache for me to do my tax filings and to get advice and so we've started title to be the one place the One-Stop shop for you as an international you can do your tax filings you can get advice internationally um you can have your bookkeeping services with us and you can do that in more than 30 countries right we are the One-Stop shop for you um it just takes away so much stress that's why I started it this is a problem that I had and I was definitely waiting for this solution so that's awesome so you hear a lot about the nhr program here in Portugal and that it's good for taxes for expats what exactly is that yeah and into our program is a program you hear a lot about it's short for non-habitual residents and it's a certain Tech status that you can apply for as a foreigner um it's it's available for people who come to Portugal for um the first time as a tax resident or better better describe it if you haven't been a tax resident for the last five years you can apply for this status and it's the beneficial tax treatment that can lower your effective tax rate basically and it will last 10 years from the moment that um that it like applies to you so if you move away let's say you move you know you move maybe back to the US and then for the years that you're in the US the time will will still keep ticking but in total you have a 10 10 fiscal years basically 10 text years to leverage this status in uh in Portugal and there's really no downside so I would recommend everyone to um to apply for nhr definitely well I see why so many expats love coming to Portugal there seems to be this belief that you pay zero percent taxes under nhr is this true the belief that it's zero percent tax is unfortunately it's a myth um so it's not that black or white um the the rule for nhr is that most income that is coming from abroad so let's say for the sake of example that um let's say you have a job abroad um but you're remotely in Portugal then as long as it's um taxed abroad then in Portugal it it is exempt from uh from taxation under the nhr status so in most cases it should still be taxed where it's coming from right so that basically means that you don't pay zero percent taxes under nhr it means that in Portugal the Portuguese side it can be tax exempt so in in order to leverage nhr properly and to to try to really have the best effects um from it it's it's best to set up a strategy with a Tax Advisor so for example with us through a title because otherwise you may be missing out on the on the benefits of it um also generally if you have capital gains on shares for example let's say you have Tesla shares to name something then that usually does not fall under the nhr machine so that will be regularly taxed according to the capital gain tax rate that will apply to you in Portugal in most cases right so um yeah is Portugal the promised land for people in cryptocurrencies yes I actually think that it still is a promised land for cryptocurrencies um if you hold cryptocurrencies for more than one year so you buy Bitcoin and you'll hold it for more than one year before you sell your Bitcoins for example and if you have a gain on that so you make a a 50 profit you uh do not pay taxes on that game if you hold it less than a year you pay a tax on that so the regular capital gains tax should apply [Music] um and so that is a very beneficial rule uh most countries in the world these days they do tax crypto gains and in this case if you hold it for more than one year right your attempt so I still consider that a very good rule if you come as a digital Nomad for two to three months do you need to pay taxes in Portugal yeah for digital Nomads you are generally okay if you stay for a short two to three month uh period so it of course depends if you have moved to Portugal right like moved away from your previous country then you are now a tax resident in Portugal in that case yes you will have to pay income tax on your worldwide income um however if you're passing through Portugal right maybe you're after Portugal visiting Spain Thailand uh Bali I'm not sure any digital Nomad destination and you work remotely then it's it's it's generally okay you don't have to pay taxes in um in Portugal but but be careful um if you are doing business with local companies right you're maybe closing contracts on behalf of your foreign company then there may be different rules so as long as you um just pass through as a digital Nomad working remotely then you should be okay and that brings me to the 183 day rule you often hear about the 183 days rule what exactly is this yeah the 183 days rule is a famous role you hear a lot about it the 183 days rule is a a hard date limit for Portugal um that if you stay longer than that in a given tax year then you become a tax resident and when you're a tax resident you have to pay taxes on your worldwide income so it's important to keep in mind when you're visiting Portugal to not stay over 183 days um however bear in mind that this is not a universal rule so for example if you go to the Netherlands then there may be different rules or there are different rules that apply there for when you trigger um becoming a tax resident in that country so but for Portugal 183 days is definitely a rule so and better than in mind so I'm an American citizen do I also need to file tax returns both in Portugal and the United States yes yes that's right as a American citizen you will have to file your taxes in the U.S as well so the US has a system that they call um taxation by citizenship so if you relocated to Portugal and you're a tax resident there you would file your taxes in Portugal but then also you have to file in the U.S however it doesn't necessarily mean that you pay twice the amount of taxes on your income it it like the system has certain exemptions and tax credits available so if you file in Portugal then if you qualify as an expats for your American Tax filing so the purpose of your American Tax findings there are certain credits like the feie which is a certain credit you can use to offset your tax burden in the U.S and in a lot of cases you actually don't even have to pay any taxes in the US but you will always have a text filings requirements so it's important to uh yeah to take this into account if you move to Portugal or any other country really for that matter okay okay thank you and if I've immigrated to Portugal from another country other than the US do I have to pay taxes that yeah that depends if you are not a American citizen then um you have to file in other countries if you have income from those countries or if you have other type of maybe you have shares from those countries and you've had a capital gain on on that um there's a lot of situations where you have to file in more than one country so um America is one of the only countries that taxes by citizenship so in this case coming from another country only if you have cut all your ties with the previous country that you've immigrated away from then you can safely say that you only have to file taxes and pay taxes in Portugal but uh whatever your situation really is it's it's safe to to check with a Tax Advisor because of course if you have something in the other country in the country expects you to file taxes and you forget to do so then there could be penalties that apply and in some countries it's even um even a criminal offense if you if you don't pay taxes so um yeah so definitely check with your tax advisor or with title with um with us of course we are experts in the international situations so um yeah just make sure you check so tell me more about what title does so title is the international tax assistance for you we are the one modern solution um where you can come for international Advice International tax filings multiple country tax filings also if you need bookkeeping in the country that you're relocating to then we can help you with all of this so we are the One-Stop shop if you may for your International tax life to make it super easy get expertise advice on all these International situations that's really um our our strength so to ease your life and to get the expertise of um of any International tax situation you uh can come to us and we can make it easy for you and who did you design title for title is great for expats digital Nomads and and truly anyone who has any International income or any International situation going on in their life so it's also for people that are an expat in a country for a few years they decide to move after let's say four years for the sake of example and need to find a new Tax Advisor in that country then we all do that for you so you stick with title um It's All in One dashboard and we have tax advisors in our team in 30 countries so um it's it's like like the days are over where you have to search for new tax advisors in your country to get whole like onboarded you know get like re-on-boarded every time you move and every time you go to a new Tax Advisor got it got it but how is the service different from a normal Tax Advisor like Turbo Tax or something like that so local tax advisors are different um to title because we are the international umbrella that um like we work with local tax advisors they work for title and and so the local tax advisors that do not work for a title they often lack the international knowledge right and so there there are often International complex situations at play when you move when you have income in another country and so if you have to manage that yourself by contacting a Tax Advisor in both countries then you will have to give them both data they will not have the international understanding necessarily so they will have to research on their own maybe even talk to each other there are language barriers and cultural barriers there's often an unforeseen Bill up front like it's unforeseen because it may grow with complexity and so it just raises a lot of extra questions that International so for us we treat International as a first class citizen we understand International complexities that are our expertise and then with our local experts our work for title we then resolve it all in an easy way with an upfront cost right like you know what you're gonna get and you you know what you're gonna resolve with us and like on top of that everything is just in a modern Sleek dashboard right so it's like simple to track and organize um yep so that's that's the true difference very very useful I think it's an amazing concept and I think it's super cool do you have any last minute tips or advice for the viewers watching um that may be considering moving to Portugal and how they're going to deal with their tax situation number two is uh navigate to the nhr program the non-habitual resident program uh if you can it there's really no downside so just applying it takes a few minutes and if you end up using it it's going to be incredibly beneficial for your years in Portugal and then number three if you move to Portugal you relocate to Portugal right you immigrate to Portugal then it can be very smart to save evidence of that move so make sure you save your boarding pass your itinerary boarding confirmation or sorry your like paying ticket confirmation saved it in a folder in your Google drive or wherever you keep it and also save some of the receipts in the first few weeks that you are in Portugal like if you go to a gas station buy a pack of bubble gum safe to receipt upload it to your Google drive if you get a gym membership in a few in the first few weeks put that contract into the Google Drive and this is this is because evidence of moving can be helpful if the country that you moved away from will ask you why you're not filing taxes at the year or if they need evidence to um to like back up your claim that you've moved to our country so it's just to be sure awesome well thank you so much for helping all the viewers understand about taxes here in Portugal and filing as a digital Nomad anywhere in the world thank you so much Luke for being on the channel and educating us all about taxes we really appreciate it yeah thanks for having me Dave uh it was a pleasure and we're always here to help people International people like you and me who need to help with their with their tax needs and for people again it's title.io with a Y and you can also book a free consultation if you go to website and there's a button on the top to get a free consultation um and I'll see you there good luck with you moving to Portugal and update logo if you are interested in checking out titles Tax Services the link is in the bio below my name is Dave in Portugal If you want to see more videos about Portugal make sure to hit the like And subscribe button I'll be posting videos on this channel every single week we'll see you next time [Music] foreign [Music]
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Channel: Dave in Portugal
Views: 12,057
Rating: undefined out of 5
Keywords: Living in Portugal, Moving to Portugal, Lisbon, Algarve, D7 Visa in Portugal, D7 Visa, D8 Remote Work Visa, Dave in Portugal, American in Europe, Algarve Addicts, Stay Classy Vlog, Madiera, Porto, Porto Portugal, Oporto, Move to Portugal, NHR Tax Scheme Portugal, Portuguese, taxes in Portugal, Digital Nomad Taxes, Taxes for Expat
Id: feg5MZRPGkE
Channel Id: undefined
Length: 18min 7sec (1087 seconds)
Published: Mon Apr 17 2023
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