Banking, Money and Taxes in Portugal
Expats will find that banking in Portugal is imperative, as in many cases, bills are paid directly from accounts.
All Portuguese banks are part of a national grouping of banks called Multibanco. This makes accounts easily accessible and account holders may use a Multibanco debit card in ATMs across the country, and for buying most goods. Cash points are common in most commercial areas.
To open a bank account in Portugal residents of EU countries will need:
Portugal taxes residents and non-residents differently. To be considered a resident for tax purposes, one must reside in the country for 183 days of the year, or have a permanent home in Portugal. If one is considered a resident, they are liable to be taxed on their worldwide income.
Expats may be concerned about being taxed in Portugal and a home country, but in many cases, tax treaties with Western nations will prevent double taxation. Often, becoming a resident of Portugal can exempt expats from higher overseas taxes. To find the most advantageous tax plan, it is a good idea to consult an international tax planner.
Resident expats working for an employer will have their income tax automatically deducted from their salary, on a sliding scale (from 10.5-42%) based on their worldwide income. Non-residents are taxed only on income derived from business in Portugal, usually at a flat rate.
The tax year in Portugal runs from 1 January to 31 December each year; expats are responsible for submitting income tax returns between 1 February and 15 March for earnings derived from salaried employment and/or pensions, and between 16 March and 30 April for all other sources of income.
Married couples should submit a joint tax return.
All Portuguese banks are part of a national grouping of banks called Multibanco. This makes accounts easily accessible and account holders may use a Multibanco debit card in ATMs across the country, and for buying most goods. Cash points are common in most commercial areas.To open a bank account in Portugal residents of EU countries will need:
- an identity card or passport
- NIF number (available from the local finance office, or finanças)
- their residency card
- proof of residence (an official document that has proof of name and address, for example, a utility bill)
Non-EU expats will need:
- a passport
- proof of address in country of origin
- tax card and proof of employment
The Multibanco system in Portugal is lauded for allowing its users a wide variety of conveniences. In addition to normal withdrawal and transfer services, at a Multibanco ATM expats can:
- Pay certain utility bills
- Load talk time onto your mobile phone
- Pay income tax and added value tax
- Purchase concert tickets
- Pay motor tolls
Taxes in Portugal
Portugal taxes residents and non-residents differently. To be considered a resident for tax purposes, one must reside in the country for 183 days of the year, or have a permanent home in Portugal. If one is considered a resident, they are liable to be taxed on their worldwide income.
Expats may be concerned about being taxed in Portugal and a home country, but in many cases, tax treaties with Western nations will prevent double taxation. Often, becoming a resident of Portugal can exempt expats from higher overseas taxes. To find the most advantageous tax plan, it is a good idea to consult an international tax planner.
Resident expats working for an employer will have their income tax automatically deducted from their salary, on a sliding scale (from 10.5-42%) based on their worldwide income. Non-residents are taxed only on income derived from business in Portugal, usually at a flat rate.
The tax year in Portugal runs from 1 January to 31 December each year; expats are responsible for submitting income tax returns between 1 February and 15 March for earnings derived from salaried employment and/or pensions, and between 16 March and 30 April for all other sources of income.
Married couples should submit a joint tax return.
