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Tax Residency Question

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  • 04-03-2021 1:36pm
    #1
    brasher
    Registered Users Posts: 208 ✭✭


    I am currently working from home and will be for the next 7 months. If I move to Portugal for that time, would I make my tax return there?

    I also have some investments. CGT is a little lower there. Would I pay the Portugese or Irish rate if I cashed out?


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    #2
    cnocbui
    Registered Users Posts: 19,728 ✭✭✭✭cnocbui


    If you are resident for the greater part of the year, I would think you would pay income tax in Portugal, but I'm not sure an employer would go with that and stop deducting tax. If you are self employed you're sorted.

    Revenue take the position that if you acqured an asset in Ireland and move elsewhere and realise a CGT event on that asset within three years of moving, you owe the CGT to them - silly, I know.

    However, once you had a Portuguese residential address and a Portuguese bank account based on that address. What transpires on that bank account won't be reported to Revenue, such as a sum of money being deposited from the sale of an asset.


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    #3
    brasher
    Registered Users Posts: 208 ✭✭brasher


    That's an interesting option. But I would pay the Portugese tax on the sum deposited into the Portugese account, because it would be reported? But I do want to comply with tax regulations. So I presume that means I just pay CGT to revenue.


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    #4
    cromelex
    Registered Users Posts: 230 ✭✭cromelex


    If you work in Portugal for more than 180+1 days you are a tax resident there for the year, meaning, you would have to pay tax over all of your income.

    Portugal is a tax nightmare if you have any sort of income, more so if it's foreign income.

    The system is also designed to make you overpay and then you can only claim back in a specific period in the following year.

    Just don't. Not worth it


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    #5
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    It would depend on the Double Taxation Treaty between Ireland and Portugal but I'd imagine if you're resident in Ireland, you'll be subject to Irish income tax. Also, your schedule E income would presumably be sourced from Ireland, meaning that it would be deducted from source via payroll.

    Re CGT, you would need to be non-resident in Ireland for 3 years before you'd find yourself being under the Portugese CGT regime (if they even have one? I'm not sure they do...)


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    #6
    brasher
    Registered Users Posts: 208 ✭✭brasher


    LawBoy2018 wrote: »
    It would depend on the Double Taxation Treaty between Ireland and Portugal but I'd imagine if you're resident in Ireland, you'll be subject to Irish income tax. Also, your schedule E income would presumably be sourced from Ireland, meaning that it would be deducted from source via payroll.

    Re CGT, you would need to be non-resident in Ireland for 3 years before you'd find yourself being under the Portugese CGT regime (if they even have one? I'm not sure they do...)

    Yeah it's the Portuguese cgt I'm interested in. Tax on my investment is 0% over there. But I'm not planning on staying there permanently so there's no advantage to cashing in while I'm there. Might as well just leave it and pay the 33% here when I'm ready.


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