What is domicile for tax purpose as an expat in Portugal? 

What is domicile for tax purpose as an expat in Portugal?

Domicile for tax purpose as an expat in Portugal defined:


Domicile for tax purposes refers to the jurisdiction or country that an individual considers their permanent home or legal residence, which determines their tax obligations. As an expat in Portugal, understanding the concept of domicile is important for determining your tax residency status and the taxes you are liable for in Portugal. 


In Portugal, tax residency is primarily determined by the concept of “habitual residence.” According to Portuguese tax laws, an individual is considered a tax resident if they spend more than 183 days (consecutive or non-consecutive) within a 12-month period in Portugal, or if they have a house available to them that suggests an intention to establish residency. 


However, even if you meet the criteria for tax residency in Portugal, your domicile may still be in another country for tax purposes. Domicile is typically determined by a combination of factors, including your permanent home, family ties, economic interests, and the intention to establish a long-term presence. 


Here are a few considerations regarding domicile for tax purposes as an expat in Portugal:  


  1. Dual Domicile: It’s possible to have dual domicile, where you are considered a tax resident in Portugal but your domicile is in another country. This can have implications for your tax obligations, as you may be subject to tax in both countries depending on their tax laws and any double taxation agreements in place.


  1. Double Taxation Agreements: Portugal has signed double taxation agreements with numerous countries to avoid double taxation and determine the taxing rights over different types of income. These agreements usually have provisions to determine tax residency and domicile, helping to clarify your tax obligations in both Portugal and your home country.


  1. Tax Residency in Multiple Countries: In some cases, an individual may be considered a tax resident in both Portugal and another country due to the different rules and criteria used by each country. In such situations, it is important to consult with tax professionals and review the specific tax laws and agreements between the countries involved to determine how your domicile affects your tax obligations.


It’s crucial to seek professional advice from tax experts who are knowledgeable about the tax laws in both Portugal and your home country. They can help you understand the specific rules, determine your domicile for tax purposes, and ensure compliance with the applicable tax regulations to minimize any potential tax liabilities or complications. 


This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, they are subject to change and we are not responsible for any errors or omissions. 


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