Have you thought of plunging into the freelance area? So, if this is what you are concentrated on right now, we are ready to help you deal with it and reveal the peculiarities of becoming a freelancer in Portugal.<\/p>\n\n\n\n
The statistics say that around 17% of Portuguese people belong to the category of freelancers or self-employed. By the way, this number is more relevant if we compare it with the average figure in the EU.<\/p>\n\n\n\n
You are going to pay a corporate or income tax but it is linked to the type of business you will start. As for the accounting methods, freelancers can stick to a few of them too. Let us cover them a bit too.<\/p>\n\n\n\n
The first option to stick to is direct accounting. In this case, you will deal with filing annual accounts and paying taxes at the standard rates. And, you will have to hire a person who will be responsible for this.<\/p>\n\n\n\n
Another option is a simplified regime. Here, you pay an income tax at the standard rates on 75% of your income and suggest expense receipts to offset 25%.<\/p>\n\n\n\n
Also, there is a special non-habitual residency regime with a 20% flat rate.<\/p>\n\n\n\n
Now, we would like to deal with tax for self-employed freelancers and sole traders. This category of people (including those who own unincorporated businesses) is about to pay an income tax (all they earn is thought to be personal earnings).<\/p>\n\n\n\n
Self-employment income obtained as a result of being involved in a certain profession or business is considered to be a category B income.<\/p>\n\n\n\n
If a sole trader makes a decision to establish a limited liability company, he should be aware of this: the assets that are not included in the personal earnings are subject to corporate tax.<\/p>\n\n\n\n
By the way, in Portugal, the more you earn, the more tax you will be obliged to pay. Non-residents will come across a flat tax rate of 25%.<\/p>\n\n\n\n
You cannot simply start a business in Portugal. But this process is linked to certain steps in other countries too. You need to go through the registration procedure to begin working.<\/p>\n\n\n\n
Opening a business in particular spheres requires knowledge of Portuguese. Therefore, you may have to take an exam.<\/p>\n\n\n\n
Self-employed must register on the Tax Office. A vital step to take in this case is submitting a self-employment registration certificate. You can do all of this either online or on location.<\/p>\n\n\n\n
Let\u2019s imagine that you are involved in calculating the taxable income. In this case, you are free to deduct some of the business expenses. They may be represented by product costs, rent payments, etc.<\/p>\n\n\n\n
Note that expenses for entertaining customers and travel can be deducted only in case they are less than 10% of all income you managed to receive. For those working from home, these expenses can reach the limit of 25% and it is the absolute maximum.<\/p>\n\n\n\n
The first thing to bear in mind is this: the tax year in Portugal runs from January 1st<\/sup> to December 31st<\/sup>. If we speak about completing the tax returns, it works this way: if you want to do this for the year 2021, the process has to be over between April 1st<\/sup> and June 30th<\/sup>.<\/p>\n\n\n\n Self-employed are free to pay the tax in three contributions: July, September, and December.<\/p>\n\n\n\n Submitting the self-employed tax takes place online. Payments you should proceed with are linked to the assessment of the previous year.<\/p>\n\n\n\n VAT has to be paid by those whose turnover exceeds 10,000 euros on taxable services and stuff. Here are the rates applicable to Portugal:<\/p>\n\n\n\nVAT in Portugal for self-employed people<\/strong><\/h2>\n\n\n\n