In less than twenty-four hours, the newly installed speed traps caught 6,000 drivers going over the speed limit.
There are 37 new speed traps operating throughout the country since the beginning of the month. Of the 37, 12 are able to record the average speed. This technology is new in Portugal.
Contrary to other speed traps, which take note of the speed in one specific location, at one point in time, these assess the time a vehicle spends going from point A to point B and calculate the average speed.
By the end of September 1st, 6,000 drivers had already been caught. The tickets have not been processed yet, but the authorities estimate that if each driver pays the minimum amount possible (60 euros), the total revenue for the state will be around 360,000 euros.
However, considering that the amount due depends on how much above the speed limit the driver was, it could be more than that. The 37 new speed traps are spread across the country, from north to south on highways, national, and complementary roads. Most were placed along national roads, in specific locations, but the new technology was specifically chosen for the main highways.
If you want to know where the speed traps are located, take a look here.
When it comes to taxes, Americans moving to Portugal find themselves navigating a unique set of rules. Unlike many countries, the United States is among the few nations that tax their citizens on their global income, regardless of where they reside. This means that even if you pack your bags and establish a new life in Portugal, your U.S. tax obligations remain a constant.
However, these overarching tax principles are just the tip of the iceberg. Every situation is different, and it’s crucial to remember that what applies to one person may not apply to another.
We recommend that to fully understand your unique tax situation, seeking personalized guidance from a tax advisor is a wise step.
In this article, we will explore the essential tax considerations Americans should consider when making Portugal their new home. Let’s take a look!
Want to become part of the large community of US expats in Portugal? Sign up for Holborn Assets’ live webinar on the challenges facing US connected clients moving or living in Portugal. Find out all about the financial perks of moving to Portugal and have all your burning questions answered. The event is scheduled for May 16 at 5 pm (Lisbon Time) / 12 pm EST. If you would like to schedule a one-on-one call instead, you can book one here.
The American tax system relies on citizenship rather than residency, so individuals with US citizenship are subject to taxation on their income worldwide, regardless of their place of residence. Nevertheless, there are tax advantages accessible to US citizens residing overseas like in Portugal.
Let’s take a look at the Foreign Earned Income Exclusion (FEIE), the Foreign Tax Credit (FTC), and the Streamlined Filing Compliance Procedure, advantages that Americans moving to Portugal can use.
The Foreign Earned Income Exclusion (FEIE)
The Foreign Earned Income Exclusion allows US citizens living in Portugal to exclude a portion of their foreign-earned income from US taxes, up to $120,000 for 2023. This amount is adjusted with inflation yearly.
According to the IRS, to be eligible for these benefits, you must meet specific criteria:
You must have income earned in a foreign country.
Your primary place of work for tax purposes must be in a foreign country.
You must fall into one of the following categories:
A U.S. citizen who has established genuine residency in a foreign country for an unbroken period, including a full tax year.
A U.S. resident alien who is both a citizen or national of a country that has an active income tax treaty with the United States and who has established genuine residency in a foreign country for an unbroken period, including a full tax year.
A U.S. citizen or U.S. resident alien who has been physically present in a foreign country for at least 330 complete days within any 12-month consecutive period.
Photo by Green Chameleon (Unsplash)
The Foreign Tax Credit (FTC)
The Foreign Tax Credit (FTC) is a protection available to U.S. expats to prevent double taxation on the same income. The FTC provides a means for U.S. expats to offset, dollar for dollar, the foreign taxes they have paid overseas, but it’s important to note that this credit only pertains to income taxes.
If you have already fulfilled your income tax obligations in a foreign nation, the FTC grants you a credit that can be applied to reduce your U.S. tax liability.
To calculate your tax credit, you’ll divide your foreign-sourced taxable income amount by your total taxable income, then multiply that result by your U.S. tax liability.
The Streamlined Filing Compliance Procedure
Many expats living abroad for years might not have realized their obligation to file annual US tax returns. If you find yourself in this situation, there’s no need to panic. The IRS has introduced a solution called the Streamlined Filing Compliance Procedures, which allows you to catch up on your taxes without incurring penalties.
To be eligible for the Streamlined Offshore Filing program, you must meet these requirements:
Demonstrate that your previous non-filing was “Non-Willful”: You must attest, under penalty of perjury, that your failure to comply with U.S. tax requirements was unintentional, stemming from either a mistake or a lack of understanding of your obligations.
Not have had a residence in the U.S. for one or more of the last three tax years.
Have been physically present outside the United States for a minimum of 330 full days during one or more of the three most recent tax years.
Possess either a Social Security Number or a Taxpayer Identification Number (ITIN). If you do not qualify for a Social Security Number and do not already have an ITIN, you can apply for one when submitting your tax documents under the Streamlined program.
Portuguese Tax System for Americans
Understanding the Portuguese tax system is extremely important as an American moving to Portugal. Keep in mind that if you stay in Portugal for 183 days consecutive or interpolated within a single calendar year, the Portuguese tax authorities will classify you as a tax resident.
Being recognized as a tax resident of Portugal entails the obligation to pay taxes on your income from all sources worldwide.
Let’s take a look at the NHR program which grants you tax cuts, as well as the social security system, capital gains tax, and inheritance tax in Portugal.
Portugal. Photo by Manuel Costa (Unsplash)
The Non-Habitual Residency (NHR) Program
Portugal introduced a favorable tax program in 2009 called the Non-Habitual Residency Program to attract skilled individuals and wealth to the country. Under this program, eligible individuals won’t have to pay taxes in Portugal on their foreign income for 10 years. Those working in Portugal can enjoy a 20% flat tax.
This tax program is open to all newcomers in Portugal who haven’t been Portuguese tax residents in the 5 years before. Once approved, the tax benefits last for 10 years and cannot be extended.
To become a non-habitual resident, you must meet the following criteria:
You cannot have been subject to taxation in Portugal during the five years preceding your application.
You need to apply for a tax residence certificate, which requires either residing in Portugal for more than 183 days (which do not need to be consecutive) within a 12-month period, living in Portugal for fewer than 183 days but purchasing property in Portugal during that same 12-month span, or holding a position in the service of the Portuguese state for the past 12 months.
The Portuguese Social Security system secures citizens’ basic rights and ensures equality in opportunities, providing support measures such as unemployment allowances, paternal leave, and other financial support.
When you are employed in Portugal, you will need to contribute to the social security system which in turn, grants you access to the national health service, for example.
These contributions are divided between the employer and the employee. The employer covers 23.7% of the employee’s total salary, while the employee contributes 11%. If you are self-employed, you are responsible for paying your own contributions, which are higher at 21.4%.
Photo by Martha Dominguez de Gouveia (Unsplash)
Capital Gains Tax
As a general rule, Portugal taxes capital gains at a rate of 28%. However, there are a number of exemptions and deductions available.
For example, if you sell your primary residence in Portugal and reinvest the proceeds in another primary residence within a specified timeframe, you won’t be subject to capital gains tax on the profit from the sale.
Keep in mind that under the NHR regime, you will not have to pay any tax on capital gains from outside Portugal.
Inheritance Tax
Portugal abolished its inheritance tax in 2004. However, a 10% stamp duty tax applies when assets are gifted or passed on at death. Still, spouses and children are not liable for stamp duty when they inherit assets.
Moreover, your US assets will be exempt, as this only applies to inheritances in Portugal.
5 Quick Tax Tips for Americans Moving to Portugal
Seek Expert Guidance: Connect with a tax advisor well-versed in the Portuguese tax system. Their expertise can help you navigate the complexities and ensure compliance with local tax laws.
Study the Portuguese Tax System: Take the time to thoroughly research and understand the intricacies of the Portuguese tax system. Being informed will empower you to make well-informed financial decisions.
Maintain Detailed Records: Keep records of your income and expenses while living in Portugal. This record-keeping is invaluable for accurate tax reporting and deductions.
Timely Filing and Payment: It’s vital to meet tax deadlines. Make sure to file your taxes promptly and settle any taxes owed on time to avoid penalties and interest.
Utilize Tax Incentives: Familiarize yourself with available tax incentives, such as the Non-Habitual Resident (NHR) regime, which can offer substantial tax benefits.
Additionally, we’ll discuss tax implications, investment strategies, and how to maximize your financial potential in your new home. Join us to gain valuable insights and ensure a secure financial future in Portugal here.
September brings a bunch of special things to do and fun events in Porto. If you’re going there this week and wondering what’s happening, we’ve got your back. Let’s check out the cool stuff you can do from September 4 to 10. From concerts to games, get ready for a unique time in Porto!
Experience an authentic evening of Fado, the soulful essence of Portugal, on Monday from 7:30 to 8:30 p.m. Hosted by Fado na Baixa, this event invites you to savor Pedro’s family-owned Tawny Port while our musicians demonstrate traditional Portuguese Guitar techniques. Live male and female Fado singers will serenade you with Lisbon’s intense Fado and the touching Coimbra Fado, a tradition upheld by university students.
Fado museum. Photo by Vitor Oliveira (Flickr)
Basilar Festival
From Thursday to Sunday, Basilar Festival takes place in Porto close to a beautiful lake. Basilar is a cozy event in Northern Portugal for music lovers. It’s all about techno music and bringing people together. With one stage, artists can focus on their music and create a close-knit vibe. The event has longer DJ sets and a small community, to promote a bonding environment.
Cocktail making class
Cocktails. Photo by Kobby Mendez (Unsplash)
For a unique experience, head to this cocktail-making class on Thursday at Maison Cocorico. You will be able to create your very own cocktail and acquire the skills of incredible barmen. Cocorico is a luxurious guesthouse, situated a 5-minute walk from the Cathedral of Porto.
Outdoor orchestra concert at Avenida dos Aliados
Porto is known for its iconic avenue, Avenida dos Aliados. This Saturday, you will get to enjoy an outdoor concert at this prestigious avenue performed by the Orquestra Sinfónica do Porto Casa da Música. An event to bid farewell to summer, this concert includes music from incredible films such as James Bond and Schindler’s List. It’s also free to attend!
As September begins, Lisbon offers many exciting events. If you’re visiting the city this week, we’re here to help you discover the top things to do. Join us as we explore the best activities and events happening from September 4 to 10 in Lisbon.
Operafest Lisboa 2023
Operafest Lisbon 2023, with the Belém Cultural Center, is showcasing “Great Singers for Today’s Opera” on Wednesday. It’s part of the Marathon Opera XXI contest promoting modern Portuguese opera. Young singers perform excerpts from recent Portuguese operas, aiming to strengthen the tradition of singing in Portuguese and support new generations of performers. Winners receive the Carlos de Pontes Leça Prize.
Rodrigo Amado & Chris Corsano
Zé dos Bois in Lisbon is hosting performers Rodrigo Amado and Chris Corsano on Wednesday. After six years, they come together again following a successful show and a shared album. Amado remains a key European saxophonist, while Corsano ventures across diverse musical landscapes.
Brunch Electronik #7
Another Brunch Electronik event is happening this week, an electronic music event that runs from 2 pm to 10 pm on Sunday. Along with incredible music and a vibrant environment, you can enjoy a variety of food at the trucks available. This week’s line up includes:
Almost 50,000 students got into university in Portugal. However, there are 38 degrees available that no one wants to apply to at the moment.
This year’s first phase of the National Contest to Access Higher Education (Concurso Nacional de Acesso ao Ensino Superior – CNAES) had almost fifty thousand placements. The number is slightly lower than last year’s, but it represents 84% of the total number of applications. The remaining 16% will have to wait for the second phase.
Most of the 1,109 degrees available are completely full. There are only 305 degrees with spots available, of which 38 are completely empty.
Interestingly, one of the most wanted areas is also the one that no one wants. Most of the degrees without any application are connected to engineering. However, the ones that everyone wants are also connected to the field. The degree with the highest average entry GPA is Aerospatial Engineering.
Apart from the above mentioned, Medicine, Law, Architecture, and International Relations degrees are very popular. The average entry GPA for these degrees in the best Universities is above 18/20.
The spots that are still available will be disputed by the remaining 16% of the applicants. If there are any spots available after the second phase, there will be a third. The goal is that every degree is full, and every student is placed.
The Portuguese President of the Republic will enact the new version of the drug law after it has been validated by the Portuguese Constitutional Court.
After the decree was approved by the Portuguese Assembly of the Republic more than one month ago, the President decided to send it to the Constitutional Court.
According to him, the autonomous regions (in this case, Madeira) were not properly taken into account, and that could cause the proposal to be unconstitutional.
According to the court’s decision, the decree is not unconstitutional. The validation by the Constitutional Court means that the law will have to be enacted by the President, and come into effect.
What’s the new Portuguese drug law 2023?
This new version of the drug law introduces two big changes. First, it extends decriminalization to synthetic drugs. Second, it removes the possession limit that was acceptable for consumption.
These changes are supposed to guarantee the effectiveness of the drug law within the new drug paradigm, and at providing a better basis for distinguishing between users and traffickers.
However, some experts argue that this version will create a ‘gray area’ that will be difficult for the authorities. They believe that this new law creates a precedent that will contribute to the worsening of the current state of the country when it comes to drugs. Instead of better defining the line that helps distinguish users from traffickers, the new version of the law blurs it. According to them, both the police force, and the Portuguese courts will have a hard time.
If you’ve recently landed in Lisbon and are wondering how to make the most of your week, fret not – we’re here to help. Get ready to explore unforgettable events and experiences in this captivating city. Let’s take a look at the top events and activities in Lisbon between August 28 and September 3.
MEO Kalorama
Meo Kalorama, scheduled from August 31 to September 2 at Parque da Bela Vista, is a distinctive summer festival. It strives to blend together music, artistic expression, and ecological consciousness, bringing together artists who are enthusiastic about pushing boundaries and contributing to society.
The festival’s current roster features prominent acts such as Florence + The Machine, The Blaze, Arcade Fire, Dino d’Santiago, and others. Attendees have the option of buying individual daily tickets priced at 65 euros each, or they can opt for a comprehensive three-day pass at 160 euros.
Mariza at Festas do Mar
The second week of Festas do Mar is taking place this week from August 31 to September 3. A 30-minute train ride from Cais do Sodré, Festas do Mar is a long-standing Cascais tradition from the 1970s.
You’ll have the opportunity to listen to amazing musicians performing right by Baia Beach. This event is put together by the local government and is free to attend. In addition to the musical performances, you’ll also find a variety of local food trucks and even stalls selling handmade crafts.
This week’s lineup includes one of the most famous fadistas in Portugal, Mariza, who will be performing on Friday.
BaIa de Cascais where Festas do Mar takes place. Photo by Vitor Oliveira (Unsplash)
Brunch Eletronik
Brunch Eletronik hosts a few events throughout the summer, including one this Saturday in Lagoa Branca, Tapada da Ajuda from 2 pm to 10 pm. This week’s line up includes Honey Dijon, I. Jordan, Gusta-vo and Luisa.
The electronic music festival is hosted outdoors, featuring plenty of food trucks with all kinds of cuisine options. We recommend buying tickets in advance as these sell out. There’s also a backstage access ticket with an exclusive bar, bathrooms, and stage access.
Culture shock comedy
This comedy stand-up show called “Are You an Alien in Europe?” is designed for expats in Portugal, starting on Monday at Lasharada. Delight in hilarious stories from comedians about unexpected cultural shocks, and add your own by sharing anonymously on paper for them to improvise on.
If you’ve just arrived in Porto and aren’t quite sure how to fill your week, worry not – we’ve got your back. We’re diving into the top things to do and events to check out, ensuring you have an amazing and unforgettable time in this vibrant city. Let’s take a look at the top events and activities in Porto between August 28 and September 3.
The World Battle
For those who love sports and dance, The World Battle 2023 is a global street sports and culture festival in Porto from August 30 to September 3. Athletes from 60+ countries will compete to earn points and a chance to represent their country in the 2024 Olympic Games. The event includes a big Breaking and Topstyle competition, as well as displays, a market, and dance workshops this week.
Anavitória concert at Casa da Musica
Performing in the iconic Casa da Musica on Friday, Anavitória is a duo known for their Brazilian music. Since releasing their first album in 2016, the duo has been accumulating achievements: sold-out concerts from north to south of Brazil, two Latin Grammys, tours in the USA and Europe, hits like “Trevo,” “Fica,” and “Pupila” among the most played songs on Brazilian radios.
Casa da Musica, Porto (Unsplash)
Jazz, Bossanova, and Tribute concerts
This event, called Café Concerto no Ateneu starts this week and has concerts on Thursdays (Jazz), Fridays (Bossa Nova), and Saturdays (Tributes). Located in the beautiful Nobel Hall of the Ateneu Comercial do Porto, you will get a unique experience in one of the most beautiful rooms in the city. A bar service is available during the show.
Photo by Chris Bair (Unsplash)
Make your own chocolate workshop
This Make Your Own Bar workshop is a fun event on Saturday where you can create your own chocolate bars. You’ll learn about making chocolate from scratch and make three personalized chocolate bars with your favorite toppings to take home. You’ll also get to taste seven different GLAD chocolate bars. This workshop will also teach you about where chocolate comes from, how it’s made, and how to tell good chocolate apart.
The Portuguese President of the Republic visited Ukraine this week to show Portugal’s support, and to be part of Ukraine’s Independence Day celebrations. Once there, he spoke Ukrainian and was the first Head of State to step foot on an actual trench.
According to what the President said in his speech during the celebrations, which was made entirely in the host nation’s language, without Ukraine´s legitimate protection, there will not be peace and security in Europe. Portugal’s position and support mirror that belief.
During the visit, the President visited a region on the outskirts of Kyiv, the Ukrainian capital. The region was completely devastated by the war. And even though it was reconquered by Ukrainian forces, it is yet to recover from all the devastation.
There is a recovery plan. However, the trench is set to remain as a reminder of the fight against Russian occupation, and the sorrow that came with it. When he was there, the Portuguese President did what no other foreign Head of State, or Minister, did. He went inside the trench.
According to Lesya Arkadievna, Deputy Governor for the Kyiv Region, the Portuguese President was the first visitor to step foot on the soil where the military and the civil population were actually fighting the occupants months before.
The visit had multiple objectives, but the main reason was to solidify the continuity of Portugal’s support. Speaking the national language and being inside the trench were unusual gestures that contributed to that purpose.
The Portuguese President of the Republic vetoed the program “Mais Habitação” (More Habitation), which was created to tackle the ongoing housing crisis.
According to a letter sent by the Portuguese Head of State to the President of the Portuguese Assembly of the Republic, the program is not enough to tackle a problem that has become dramatic, crucial, and very urgent.
Among the main reasons, the Portuguese President stated that the program is not credible enough when it comes to its short-term execution.
According to his words, the Portuguese State would not take direct responsibility when it comes to building viable housing solutions, and the program would not provide immediate solutions to those in need.
This presidential veto brings good news for those hoping to benefit from opportunities presented by the Golden Visa program. The current failure of the “Mais Habitação” program means that property investment from as low as 280,000 euros is still among the criteria to qualify for the Golden Visa for the time being.
According to Portuguese law, after the veto, the decree is supposed to be sent back to the Parliament for amendments. This bureaucratic procedure allows approximately 45 days before the President reassesses his decision.
Note, however, that after the 45-day period, the Government will be able to force its hand. If the law comes into effect, the criteria to qualify for the Golden Visa will be reduced, remaining open mainly for investment funds with a minimum investment of 500,000 euros.
Considering Portugal’s Golden Visa Program? Everything you need to know + how to qualify with 325,000 EUR
If you’re interested in finding out the latest details about the Golden Visa program and want to take advantage of the new opportunities. Signup for a live Q&A webinar with an expert from Holborn Assets that will answer all your questions. The event is scheduled for February 13 at 5 PM Lisbon Time (1 PM EST). The live webinar will cover the following:
Golden Visa basics, how to qualify, who can be included
New Investment Criteria for 2024
Golden Visa timeline and process
How to qualify with just 325,000 EUR – this exclusive offer includes investment loan financing to bridge the gap to reach the 500k minimum investment
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