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Best arrangement for working in PT for outside PT company?

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Posts: 26
Premium Member
Topic starter
(@healthy_move_portugal)
Eminent Member
Joined: 2 months ago

Hello,

 

I have a meeting with my COO and HR mnager scheduled on friday 27th septeber (next weeks friday).

What would be the best arrangement for me still working for my dutch employer from Portugal?

- Freelance?
- self-employed and then hired by company?
- keeping my current working contract but change adres to portugal (what happens then to the social incurances like unemployment, healthcare and so on?)

 

Any advice would be apprechiated.

I expect that i will be asked how i want to continue the relationship once i have moved to portugal.

 

cheers and thanks

Matthias 🙂

12 Replies




Posts: 390
Ask Our Expats Consultant
(@thomasribatejo)
Member
Joined: 4 years ago

This is a complex area, and an accountant in Portugal should be consulted, based on all of your specific circumstances.  However, points to bear in mind:

  • If you bill as a freelancer/self-employed, you may be obliged to add VAT, and this may or may not be acceptable to your current employer;
  • Keeping your current contract can create complexities regarding Segurança Social, and this can be a minefield (and may be much more expensive than in NL).  If your employer has no office/agent in PT, you become that agent de facto, and may be liable to pay employer and employee contributions to SS, which is a lot of money;
  • Again in the third hypothesis, epending on the NL SS approach, they may be unwilling to take you out of their system, if they consider your work to be "in the Netherlands" even if you are not there.  For this, you (or your company's finance people) will need to speak to them.  If they are at all like the UK, they may expect evidence that you are paying in PT before they'll stop you paying in NL.

I have spent nearly 3 years ironing this out for myself, with an accountant.  If your company accepts you setting yourself up as a Unipessoal or Empresa, and billing them incl VAT if applicable, my experience suggests that would be the least complex from a bureaucratic perspective.

A good accountant with relevant experience with foreigners working in Portugal for companies abroad should be able to help, but explore this in depth with them, to be sure that they really understand your situation.  Your third hypothesis remains "unusual" and therefore is not well-covered by regulation and experience, even though there are actually quite a lot of us doing it, and wanting to follow the rules.

The income tax side of things, in this case, is so much easier!

Good luck with it!

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Posts: 190
Premium Member
(@itexpert7)
Estimable Member
Joined: 1 year ago

@thomasribatejo
Do you really need to charge VAT to a business outside Portugal? I thought you can exempt the VAT for foreign business to business transaction. I've actually done that a few times when UK was still in the EU.

What I did to hire workers in Portugal through my UK company was to have them as freelancers. No VAT, and they registered for recibos verdes (=self employed), and pay their own taxes and their own social security (which are high, like in NL).

@healthy_move_portugal
I talked with an accountant a few weeks ago, and you may have another option:
Set up a Portuguese company, and under the NHR **if** your profession is one of the approved ones, pay only 20% tax on the dividends of that company (no corporation tax for small companies that you own over 75%, which sounds too good to be true, I will ask my accountant again.). Then you could buy a car on the company, and save the VAT and tax on it if it's electric or PHEV.

Or if not under NHR, set up a Dutch company, and have your employer pay the company, and you get paid with dividends in Portugal with 0% Portuguese tax, under NHR again.

You need some serious talks with more than 1 expert accountant.

My accountant which I just started with is All Finance Matters in Tavira. Convenient if you're in the Algarve.

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Ask Our Expats Consultant
(@thomasribatejo)
Joined: 4 years ago

Member
Posts: 390

@itexpert7 In my circumstances, both my main accountant (and the one I use to sense-check stuff) advised that it was not possible to avoid levying IVA, were I to provide services to my employer on a freelance/contract basis, whether "as myself" or through a company.  The circumstances for @healthy_move_portugal may be different, so as we've both said, in-depth, experienced accountancy advice is going to be essential.

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Premium Member
(@itexpert7)
Joined: 1 year ago

Estimable Member
Posts: 190

@thomasribatejo |
In which country is your employer located?

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Ask Our Expats Consultant
(@thomasribatejo)
Joined: 4 years ago

Member
Posts: 390

@itexpert7 in the UK

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Premium Member
(@itexpert7)
Joined: 1 year ago

Estimable Member
Posts: 190

@thomasribatejo 
I have repeatedly many times used Portuguese companies (advisors and EI imigrante) to invoice my UK company, and paid them *without* IVA.
That was before and after Brexit.
As in business to business export/import there's no VAT.
They checked with their accountants every time and said they will not charge IVA. (As a UK company has no chance of getting a refund on foreign VAT).

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Ask Our Expats Consultant
(@thomasribatejo)
Joined: 4 years ago

Member
Posts: 390

@itexpert7 This may be entirely appropriate in your circumstances, but whilst there is some similarity, they are not the same as mine.

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Posts: 26
Premium Member
Topic starter
(@healthy_move_portugal)
Eminent Member
Joined: 2 months ago

thank you for all the replies and information 🙂

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Posts: 26
Premium Member
Topic starter
(@healthy_move_portugal)
Eminent Member
Joined: 2 months ago

Where can i find such an accountant? (AFM from business directory?)
I will be in PT 4th of september for 2 weeks and want to try and get an appointment in that time if possdible.

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