Operating losses of resident corporations or a branch of a non-resident corporation may be carried forward and deducted from taxable profits for six years. No deduction is allowed in the following two situations: (a) if the nature of the business has changed significantly from when the losses occur, (b) ownership of 50% or more of the share capital has changed from the year in which the losses were incurred. Social security contributions – The employee contributes 11% of the gross monthly salary and employers pay 23.75%. A different regulation applies to the members of the Board of Directors. The quality of healthcare in Portugal through the SNS is quite good. However, some EU citizens who retire in Portugal also take out additional health insurance. There are a variety of voluntary social and private health insurance. While you may face double coverage and thus double taxation of Social Security or other Social Security programs offered around the world, keep in mind that as a U.S. citizen, you are eligible for your Social Security benefits no matter where you live. It is quite possible that you may receive benefits from more than one country during the retirement years if you meet the eligibility requirements of each country. The retirement age in Portugal is 66 years and 3 months for both women and men.
In Portugal, there is a state-sponsored pension to which residents are entitled if they have paid social security contributions for at least 15 years during their Portuguese employment. There are also pensions from private companies. State pensions as defined are not taxable in Portugal. Social security is treated as a private pension in most contracts – the US treaty (including the Netherlands) is an exception. The government is (in a sense) the trustee of private pension plans. Unfortunately, you mistimed your move – the law had to be changed due to internal and external pressures. Finland terminated the contract with Portugal mainly for this reason. Sweden also threatened the same simplified regime: companies that (a) had a total turnover of less than EUR 149 639.37 in the previous year; and (b) have not chosen to be valued in accordance with the above-mentioned general regime, are subject to the simplified tax regime. Under this scheme, taxable income is calculated as follows: – 20 % of turnover from the sale of goods; more – 70% of gross income from other sources Tax starts to be deducted for both with about €9,300 per year. Minimum wage workers, who make up a large portion of the workforce, do not earn enough to pay income tax, although deductions are made for social security contributions. Global capital gains realized by resident companies are included in taxable income and are taxed at a flat rate of 26.5%. The result is the difference between the proceeds of sale and the acquisition cost, which can be updated using official inflation coefficients.
If the proceeds of the sale are reinvested in other fixed assets, 50% of the realized profit (less associated losses) is excluded from tax. For this purpose, reinvestments made during the previous year, the sales year and the following two years are taken into account. Foreign residents may be exempted from social security in Portugal if they contribute to a compulsory social security system in a European Union (EU) country or in a country that has concluded a bilateral social security agreement with Portugal, provided that they are in possession of the appropriate certificate of coverage. It depends on the amount of each individual whether it is beneficial for you or not. Social security pensions are generally taxable in the country of residence under the DTA, and although public sector pensions are generally taxable only in the country of origin, they are taken into account in calculating the rate at which other income is to be taxed (e.B. if you have €15,000 each, you will not be taxed on the SS pension, as if it were your only income. Your starting point for this on the tax scales would be the applicable rate(s) from 15,000 to 30,000. I hope this makes sense!) In general, the agreements provide that a person must contribute to the social security of his or her country of origin if he or she is sent abroad under a contract or if he or she does not intend to remain abroad for more than three to five years. For longer-term contracts or those that do not have immediate return plans, a person contributes to the social security program of their host country. However, there are exceptions to these rules, so expats should check the details of the tabulation agreement with their host country.
Can you elaborate on my particular situation only with regard to NHR status? I do not understand why the civil service is mentioned in the rules of the COMMISSION, because I do not have a government service in my professional background so far. This is where I think the terminology factor (differences) comes into play and confuses things. The United States provides a standard deduction before adjusting taxable income to determine whether or not to pay an additional amount. I don`t owe anything at the end of the U.S. tax year. If you`d like to learn more about expat social security and taxes, we have some great resources available on our FAQ page. Or, if you want to talk to one of our experienced accountants about how Social Security affects your expat taxes, we`re here to help! Hi Paulo, I don`t understand this post from you. How does that fit into the NHR regime we are talking about here? Even if that is the case, it does not seem to me to make sense. Portugal is still a state governed by the rule of law, not a totalitarian regime. It is not a party (which will lead to a government) that freezes the accounts, the accounts are frozen by the banks, by a judicial officer of a court who asks the Banco de Portugal for information on all the bank accounts in which the debtor holds them. These may be legal proceedings that take place in court or debts, for example, to financial or social security authorities.
While it is ironic, the observation was not clear. I apologize for that. It reminds me of a situation that occurred in August of this year with the President of the Republic, Marcelo, who was constantly questioned by a woman at the Porto Book Fair. In the end, he said: “The Portuguese voted for this party. Tell the Portuguese to vote for another party. Michael, remember that you also have to pay U.S. taxes on your Social Security distributions to the U.S. IRS. Maybe not everything. Depending on your income for this year, it can reach 85% of it. But the taxes you have to pay in the U.S.
and the PT usually match the higher rate of the 2. It is not in addition to. So, let`s say, just as an example, it`s 12% for the U.S. and 10% for PT, it will end up being 12%, but not evenly split between the U.S. and the PT. And let`s say you decide not to move to PT and stay in the United States. You also have to pay state taxes. You need to do the math based on the breakdown of social security that you and your wife expect + other sources of income. @bonniem I think you should talk to a tax advisor who is familiar with both tax laws.
.