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/territory, 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/territory 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/territory 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/territory), they will be liable to PIT only on their 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?