Portugal - Special considerations for short-term assignments

Special considerations for short-term assignments

Taxation of international executives

Related content

Residency rules

Taxable income

Additional considerations

For the purposes of this publication, a short-term assignment is defined as an assignment that lasts for less than one year.

Residency rules

Are there special residency considerations for short-term assignments?

If the assignee qualifies as a non resident in Portugal under the rules foreseen in the Double Tax Treaty entered between Portugal and the individual’s home country, the assignee should be registered with the Portuguese tax authorities as non-resident for tax purposes. In case the assignee is resident in a country outside the European Union or the European Economic Area, a tax representative should be appointed.

Payroll considerations

Are there special payroll considerations for short-term assignments?

If a STA continues to be paid by the home country employer entity and if the related costs are not charged to the Portuguese company, then taxation may be avoided in Portugal provided that a double tax treaty applies.

Taxable income

What income will be taxed during short-term assignments?

As a STA (KPMG in Portugal assumes that this assignment regime lasts less than 183 days and the individual qualifies as a non resident for tax purposes in Portugal under the rules foreseen in the Double Tax Treaty entered between Portugal and the individual’s home country),  he/she will be liable to PIT only on his/her Portuguese source income  (i.e., income paid/borne by a Portuguese company).

Additional considerations

Are there any additional considerations that should be considered before initiating a short-term assignment in Portugal?

No.

© 2016 KPMG & Associados - SROC, SA, a Portugal corporation and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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