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Hi Jimmy,

Being a Canadian citizen, you will need a visa for yourself and family to live in Portugal:



But as you are also an EU citizen, you shouldn't need a visa for yourself .... but all your family members are EU citizens ?... For more details, please contact the Portuguese Consulates in Canada:



As you will have to rent a house or purchase any type of goods or services, such as school for your children, you will always need a NIF (Portuguese tax identification number).

You only become tax resident in Portugal, if you apply for this statute to the Portuguese tax authorities, such as NHR / Non Habitual Resident status (stay in Portugal for at least 183 days during 1 calendar year), thus enjoying tax benefits in Portugal. But you only have that statute if you want to and if you ask for it...

Kind Regards

Hi Johnny,

My wife and kids are also EU citizens.

As I will need to rent a place to live as well as register my kids in a school, it seems I am forced to register for a NIF thus become a resident for tax purposes in Portugal (in addition to the fact that I will spent 10-11 months in Portugal).

Canada and Portugal have a tax treaty and under it if I become a tax resident in Portugal I become a deemed non-resident in Canada which has the implications I listed in the original post I'm trying to void.

Thanks for your help.

NIF and Resident for tax purposes are different things.
You will always need a NIF to live in Portugal. Having a NIF does not mean you are a Resident for tax purposes in Portugal.

Hi Jimmy,

You can have a Portuguese fiscal number but you don't have to pay your IRS here. If you mantain your fiscal residence in Canada, you will remain paying your taxes there.
You may still have to file an IRS form here, depending on how long you stay, but if you declare you're being tributed abroad, that's fine, as long as you're not working or receiving work payments in Portugal, obviously.
WR
Susana

Are you saying even if I stay 300 days in 12 months I can still declare I am not a tax resident? If so, then what about the 183 days rule?

Thank you!

Hi

My understanding is if you spend 183 days in 12 months in Portugal, you are considered a resident.

I would suggest you split it over a couple of years spending less time in Portugal than Canada before moving if you want to enjoy both worlds.

Unfortunately this will affect the children’s schooling unless you can find a school with similar curriculums to Canada in Portugal. I moved several times but always stayed for a few years in each place.
This is a difficult one. Hope this helps.

Buds

According to Portuguese tax law in force since January 2015 (Article 16), you are deemed to be resident in Portugal for tax purposes if you meet either of the following conditions. Firstly, if you spend more than 183 days, whether consecutive or not, in Portugal during any 12-month period starting or ending in the fiscal year concerned. Secondly, if you own a property in Portugal that is considered to be your habitual residence, even if you spend less than 183 days of the year there.


(Source: Portuguese AT Tax Authority)


If you find that you meet the criteria for both your country of origin and Portugal, then residency will be determined under the two countries’ double taxation treaty:


(Choose 2020 PDF doc, then Canada)

If you have assets both in Canada and in Portugal, where should you pay your taxes? This inevitably depends on a number of factors, but most importantly on where you are considered to be tax resident.

The 183 day rule is only relevant if you're not a EU citizen and need to apply for a resident permit. Which is not the case.
But even as a resident or residence applicant you don't have to pay your income tax here, as long as you're not working here. You just have to show you have means of sustenance. This may be relevant regarding not you,
but any family a members accompanying you, who are not EU citizens.
Anyways, once residing here, I suggest you talk to an accountant. You do have to file a tax form informing of your Canadian IRS.

WR

Hi again,

The 183 day rule is only relevant if you're not a EU citizen and need to apply for a residence permit. Which is not the case.
But even as a resident or residence applicant you don't have to pay your income tax here, as long as you're not working here or receiving the payments here. You just have to show you have means of sustenance. And that you have filled and payed IRS abroad.
If you come to buy property, just make sure you buy it as a secondary residence. The purchase tax is a bit higher but that way you should be able to maintain your fiscal residence in Canada.
Anyways, I suggest you talk to an accountant that is used to working with expats. I think you do have to file a tax form as a non-resident, informing them of your Canadian IRS but here should be no double taxation. I would check with an accountant for specific agreements between the 2 countries.
There should only be place for taxation here if you receive income payments here directly or later on, if you sell a property you've purchased as a secondary residence.
On the Canadian side, I would check if your obliged to inform them of spending more than X time abroad.

WR

Hi Susana,

It seems to me that you are mixing concepts here. The concept of tax resident in Portugal applies to any citizen, whether EU or non-EU. The 183 days rule applies to all, according to previous article 16.

From the moment you are tax resident in Portugal, you have to file an income declaration in Portugal, according to the rules previously set by the Portuguese Tax Authority- AT and according to the taxation rules defined under the convention agreements with the taxpayer's country of origin, whether from an EU or non-EU country.


______

For an EU citizen:



Each EU country has its own definition of tax residence, yet:

- you will usually be considered tax-resident in the country where you spend more than 6 months a year

- you will normally remain tax-resident in your home country if you spend less than 6 months a year in another EU country.

Hi Johnny,

Living here and having fiscal residence are separate things. When you're a EU citizen living here but you mantain a primary residence abroad, you receive your income there and you pay your taxes there, you only become a fiscal resident in Portugal if you do desire, independently of how long you stay (for EU citizens there's no limit). As you said, you do need to file IRS form, but you can do it as a non fiscal resident, showing your proof of tax payment abroad to avoid double taxation.
I just read the concept of Resident on the treaty you've linked, and it clearly states that a person that has habitual residence property in both countries, is considered a resident in the country where they maintain work, income and other relevant links.
So, as long as there's no income received in Portugal and property is not purchased as primary residence, Portugal will not automatically consider a person a fiscal resident. Looks like Canada won't either but I haven't read the whole treaty. However it looks like, unless there are other Canadian requirements (for ex. Number of days spent abroad), there should be no issue.
I would confirm with the relevant authorities and talk to an experienced accountant for any specifics regarding Canada.

WR

Susana and Johnny thank you very much for your inputs!
I'll make sure to consult my Canadian accountant as well as a Portuguese accountant familiar with expats returns.

Thanks again.

You're welcome Jimmy. I wish you all the best on your plans to move here. I've lived in Canada (Alberta) for a year when I was young and loved the experience, despite the harsh winter that year. It's great to try out new places and have different experiences, specially for kids. It always brings a different perspective on the world.
Enjoy your weekend.

WR
Susana