Considering recent changes in Portugal for retirement income taxation, if USA Social Security income is your only source of yearly retirement income, does the new 10% tax apply? If it is subject to the 10% tax, does the Non-Habitual Resident scheme protect you from paying it for 10 years? (I have savings in the States, but they are not subject to Portuguese income tax.)
I have had consultations with two tax professionals here in Portugal and am not comfortable with the mixed answers I'm getting.
One wanted to know if my Social Security income came from self-employment (independent contractor or sole proprietorship), federal employment or private company employment. That question alone is a dead giveaway that Portuguese tax pros may not understand how our Social Security system works. I'm getting the impression that they are used to dealing with people from the UK and terminology from there may differ from USA definitions. So, just to be clear, USA Social Security is based on total earnings over many years and it makes NO difference where the earnings came from (private companies, self-employment, or federal jobs).
One consultant actually told me that, even though with the new rules under NHR, Social Security would be taxed at 10%, he could find a way around it!! I'm not trying to do something to "skirt" paying taxes I just want to know what to expect via the any new tax laws!
Appreciate knowing what others have experienced with this issue.
Thanks,
Bonnie