[ Offshore Tax ] Are there Special Tax Breaks When Living In Spain Or Portugal?

Описание: Are there special #TaxBreaks when living in Spain or Portugal?

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DERREN JOSEPH:
Let's talk about Spain and Portugal. You can be in Spain, you can be in Portugal and as a foreigner or expat or a nomad living in Spain or Portugal, or one of the other European countries. I mentioned you can make an election with the tax authority to treat your income in a specific way where they will only tax your domestic income. So, any in this case, in Portugal only the money arising from some sort of income-producing activity in Portugal would be subject to Portugal tax. The rest will not, the stuff that you earn in the US is not subject to tax. Same in Spain, but there are exceptions. It's very, very nuance. And this is where having professional advice comes in. If its rental income from the US, it will be subject to taxes in Portugal. But if it is securities income, or if it is pension income, the answer is yes, it will be subject to tax both in the US and in Portugal. Now up until I think it was around March 2020, the pension income would not have been subject to taxes in Portugal, but there were some complaints within the EU, from the Northern European countries, they complained to Brussels, and they put pressure on Portugal to amend that part of their tax rule.

So, if you are and I'm talking about those who are in Portugal under the NHR or the Non-Habitual Residence status, so US income that's business as usual. But if you apply for, and you get NHR status, only your Portugal source income would be subject to tax, the US income, no, but there are exceptions. One of which is securities income, but rental income won’t be subject to Portugal taxes and your pension income as of March last year, your pension income will also be subject to taxes in Portugal if you grandfathered in. So, if you had an NHR status prior to the change in the rules last year, no, you won’t be subject even the pensions won’t be taxed in Portugal. So, depends on when you got NHR.

Again, Europe, very general, but I think these are the right questions to ask as a US person. Just take it as given that you will be subject to taxes in your worldwide income regardless of where you reside. So, the question becomes, yes, I have US taxes to worry about, but I also have taxes in the other jurisdictions that I'm exposed to. How can I plan? How can I execute things in a way that minimizes my tax burden across the border? Sometimes we have to do calculations that look at well, you know, by taking certain actions in let say Singapore, to reduce your Singapore income, you may actually be increasing your taxes in the US and vice versa by adopting and leveraging certain strategies to reduce your US taxable income you may inadvertently increase your Singapore income. So, it can't be looked at in isolation. You ask the right question, my US side, I need to look at, but also the other jurisdictions in which I am exposed. I need to look at both, simultaneously.

VOICEOVER:
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