close
Share with your friends

Portugal - Special considerations for short-term assignments

Special considerations for short-term assignments

Taxation of international executives

1000

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 1 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/jurisdiction, 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/jurisdiction 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/jurisdiction 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/jurisdiction), they will be liable to PIT only on their 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.

Disclaimer

All information contained in this publication is summarized by KPMG & Associados – SROC, SA, the Portuguese member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The information contained in this publication is based on the Portuguese Personal Income Tax Code, enacted in 1989, updated as of January 2015 according to the Portuguese Personal Income Tax Reform as well as 2020 State Budget Law.

Copyright

© 2020 KPMG & Associados – SROC, SA, the Portuguese member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal

Stay up to date with what matters to you

Gain access to personalized content based on your interests by signing up today

Sign up today