FAQs
TAX
According to the Portuguese tax law in force since January 2015, an individual is deemed to be resident in Portugal for tax purposes if one meets either of the following conditions:
• Spends more than 183 days (about 6 months), consecutive or not, in Portugal in any 12 months starting or ending in the fiscal year concerned.
• Regardless of spending less than 183 days in Portugal, maintains a residence (i.e. a habitual residence) in Portugal during any day of the period referred above, with the intention to use it and keep it as one’s primary residence.
As a rule, the taxpayer will become resident in Portugal as of the first day of stay in the Portuguese territory and non-tax resident as of the last day of stay in Portugal, with a few exceptions.
Seafarers employed on vessels are exempt from personal income tax (a minimum stay of 90 days (about 3 months) in the vessel is required, in each tax year, among other conditions). They are also eligible to pay reduced rates of contributions to social security (in total, 6%, being 4,1% borne by the employer and 1.9% by the seafarer). The social security benefit shall apply on the day following the day on which the law, once approved, is published in the Official Gazette.
NOTE: The tax scheme will apply to the salary paid in Portugal, and as per the Separation Allowance that will always be tax free.
Yes, Individuals who are tax residents in Portugal, or non-tax residents who obtain income here (with some exceptions) are required to prepare and submit a tax declaration in Portugal. This declaration must be submitted between April 1st and June 30th of the year following the year in which the income was obtained and must be submitted electronically in your personal area of the Finance Portal.
NOTE: Our partner in Portugal will take care of your tax obligations and any other requirements need it with the tax authorities.
NHR status can help taxpayers pay less tax or even exempt them from paying tax in Portugal altogether. The status is available for 10 years.
NOTE: It is part of our onboarding to make sure all our employees/contracts are register under the NHR-Tax Regime.
IMMIGRATION & VISA
Firstly – The contractor/employee needs to understand that the D1 VISA is only valid for 12 months, and he/she would have to stay and work under the Sea Senso contract agreement for a minimum of 5 years with the yearly visa renewal.
“Portugal offers a pathway to citizenship to those who have legally resided in the country for a period of time. This process, known as naturalization, requires applicants to have lived in Portugal, or held a residency visa, for a minimum of five years.”
The eligibility for naturalization is not solely based on the duration of residency. He/She must also demonstrate a sufficient level of Portuguese language proficiency, have no criminal record that is relevant to the Portuguese authorities, and show ties to the Portuguese community.
(Hypothetical example; working for 8 years onboard yachts, achieving passport after 5 years, then 3 years later choose to return to the UK)
Firstly, the contractor/employee will always be a UK national, and for now, the UK accepts multiple passport holders. As per being a tax resident in the UK the tax residency law under HMRC states the following:
“If you spend fewer than 16 days (about 2 and a half weeks) in the UK in a tax year, then you will always be non-resident in the UK for that year. If you spend 183 days (about 6 months) or more in the UK, then you certainly will be considered as a tax resident in the UK for that year.”
NOTE: Refer to Questions T.04 and T.05 for further information on tax / NHR Tax Regime in Portugal.
VISA – Under the D1 Visa in Portugal, which is granted to employed workers, the visa holder must follow certain residency requirements:
Once an employee/contractor obtains the residence permit, the general rule is that he/she should NOT be absent from Portugal for more than six consecutive months or a total of eight non-consecutive months, within a validity period of the residence permit. Exceeding these limits without proper justification can jeopardize the renewal of the residence permit.
TAX – As a Portuguese tax resident, the general rule applies (See answer on question T.01), If you plan to be away from Portugal for an extended period and wish to avoid being taxed as a Portuguese resident, he/she will need to be mindful of the following:
Time Spent Abroad – Maintaining Habitual Residence – Double Tax Agreement – Informing the Portuguese Tax Authorities – Tax Clearance.
NOTE: Our partner in Portugal will be available to assist our employees/contractors during the exit process or any other questions related to Tax immigration.
SALARY & SOCIAL SECURITY
Your wages received in Portugal must be pay into a Portuguese bank account, our partner in Portugal has an agreement with Novo Banco and as part of the onboarding process on each applicant (EU passport holder and non-EU passport holder) will have an operating personal bank account at Novo Banco
See link for the Novo Banco site: https://www.novobanco.pt/
As per the Separation Allowance, the employee/contractor may request to be paid at any other bank account within the EU, should he/she wish to receive funds at a bank account outside the EU Sea Senso will not be responsible for transferring fees, FX fees, or conversion rates.
We at Sea Senso advise our employees/contractors to open a Wise or Revolute account to facilitate and avoid any unwanted bank charges.
NOTE: The tax rate is the 2024 Financial Year.
Practical Example over the yearly Gross Salary of 25.000,00€.
• Monthly Gross Salary – 2.083,33€
• Less Deductions – 596,37€
• Monthly Net Salary – 1.486,96€
NOTE: The total deduction of 596,37€ is a breakdown of 299,17€ in Social Security, and 367,21€ in IRS (tax deductions).
Plus, the employer will pay an extra 494,79 in Social Security Contributions.
Social Security Contributions – Part paid by the employer and Part paid by the employee
Social Security is the system that ensures people’s basic rights and equal opportunities, through access to a set of benefits and support in terms of illness, parenthood, unemployment, and disability, among others. The system is valid both for Portuguese and foreign citizens who make contributions to Portugal. Both employees and those self-employed pay contributions to Social Security.
If you are employed, the amount for social security is automatically deducted from your salary by your employer. The employer is responsible for registering employees with Social Security. They must therefore provide information about their address and NISS, their civil identification documents and their Tax Identification Number (NIF).
If you work as an employee, your contribution to Social Security is equivalent to 11% of your gross salary (total income without deductions). This amount is automatically deducted by the employer.
In Portugal, the social security contributions you make are typically not refundable. However, there are certain scenarios and agreements that might affect how your contributions are handled:
• Pension Benefits – The contributions you make to the Portuguese social security system go towards building your entitlement to various social security benefits, including old-age pensions, disability pensions, and other social benefits. If you have made sufficient contributions, you may be eligible to receive these benefits upon reaching retirement age or if you meet other qualifying conditions.
• Social Security Agreements – Portugal has social security agreements with various countries. These agreements often allow for the totalization of periods of insurance, meaning that the contributions you made in Portugal can be considered together with contributions made in other countries to help you qualify for benefits. If you move to a country that has such an agreement with Portugal, you may be able to benefit from the combined contributions.
• Refunds for Non-EU Nationals – In some cases, non-EU nationals who have contributed to the Portuguese social security system and then leave Portugal permanently might be eligible for a refund of their contributions, depending on the specific rules and bilateral agreements between Portugal and their home country. This is rare and depends on the specifics of the international agreement.
• Transfer of Contributions If you move to another EU/EEA country or Switzerland, your social security contributions in Portugal can be transferred and combined with contributions in the new country under EU
DOUBLE TAX TREATY
Tax Credits – Exemptions – Reduced Withholding Tax Rates – Permanent Establishment Rules – Tax Residency
Portugal’s double taxation agreements follow the guidelines of the OECD Model Tax Convention, which provides a framework for allocating taxing rights and resolving tax disputes.
NOTE: Our Partner in Portugal has prepared a tax guideline as part of our onboarding to each employee/contractor.
The tax guidelines will focus on each individual and their country of residence.
SEAFARER
VISA & RESIDENCY STATUS
Yes, your time away from Portugal as a seafarer can affect your residency pathway and status in Portugal. Here are some key points to consider:
Maintaining Residency Status
• Temporary Absences – Short-term absences from Portugal for work or travel do not usually affect your residency status, provided you maintain ties to Portugal (e.g., family, property, bank accounts).
• Long-term Absences – If you are absent from Portugal for extended periods, this might impact your residency status, especially if you do not maintain significant ties to the country.
Permanent Residency and Citizenship
• Permanent Residency – To obtain or maintain permanent residency, you generally need to demonstrate that Portugal is your primary residence. Prolonged absences without maintaining ties to Portugal could jeopardize your status.
• Citizenship – For naturalization, Portugal typically requires continuous residence for a certain period (usually five years). Prolonged absences might reset this period unless they are justified and do not imply a break in residency.
Special Provisions for Seafarers
• Consideration of Seafarers’ Absences – Portuguese law might provide specific considerations for seafarers who are often away from the country for work. Such absences might not necessarily impact their residency status if they can demonstrate that their primary residence remains in Portugal.
National Immigration Service Guidelines
• The Serviço de AIAMA (Immigration Department in Portugal) can provide specific guidelines and exceptions for seafarers. It’s advisable to consult SEF or a legal advisor to understand how your specific situation is treated under current regulations.
Maintaining Documentation
• Evidence of Ties – Keep thorough documentation of your ties to Portugal (e.g., family connections, property ownership, financial records) and records of your time away for work to support your residency claims.
To ensure compliance and maintain your residency status, it is essential to stay informed about the relevant regulations and consider consulting with a legal or immigration advisor who can provide personalized advice based on your circumstances.
In Portugal, seafarers are subject to specific tax rules that can provide significant tax advantages. Here are the key points regarding the tax treatment of seafarers in Portugal:
Resident vs. Non-Resident Taxation
• Residents – Portuguese tax residents are subject to personal income tax (IRS) on their worldwide income. However, seafarers who are residents but work on vessels that operate internationally may benefit from special tax exemptions.
• Non-Residents – Non-residents are taxed only on their Portuguese-source income. If their employment income is not considered to be sourced in Portugal, it may not be subject to Portuguese tax.
Special Tax Exemption
• Article 72 (7) of the IRS Code – This provision grants a 100% exemption on employment income earned by seafarers who are residents in Portugal but work on vessels that operate outside Portuguese territorial waters for more than 183 days in a calendar year. This effectively means that income earned from such employment is not subject to Portuguese income tax.
Social Security
• Seafarers working on Portuguese-flagged ships or for Portuguese companies are generally required to pay Portuguese social security contributions. However, international agreements and specific rules may apply, depending on the seafarer’s nationality and the flag of the vessel.
Non-Habitual Resident (NHR) Regime
• Seafarers who qualify as non-habitual residents (NHR) in Portugal can benefit from a favorable tax regime for a period of ten years. Under the NHR regime, qualifying foreign-source income, including some employment income, may be exempt from Portuguese tax.
Double Taxation Agreements (DTAs)
• Portugal has an extensive network of DTAs which may influence the tax treatment of seafarers. These agreements can provide relief from double taxation and clarify the taxation rights between Portugal and other countries regarding income earned by seafarers.
WHERE CAN I APPLY FOR A CRIMINAL BACKGROUND CHECK?
https://www.fbi.gov/how-we-can-help-you/more-fbi-services-and-information/identity-history-summary-checks