Taxation of international executives
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.
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.
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).
Are there any additional considerations that should be considered before initiating a short-term assignment in Portugal?