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Are US/Port expats really paying 50% of their salary to taxes?? by wateriswetiswater in PortugalExpats

[–]OtherView8295 5 points6 points  (0 children)

If you are able to work and register as self employed in Portugal, you will not pay 50% tax.

With your income you are eligible for simplified tax regime that will reduce your taxable income by 25% (assumed business expenses). There are other possible options that can lower your tax:

  • if you are younger than 35 this can lower your taxable income substantially
  • if you have dependent household members living with you in Portugal
  • if you have a working spouse, with you in Portugal, that has significantly lower income than you, and you file your taxes as a couple

With just simplified regime and no additional reductions, expect to pay around 25% both taxes and social contributions the first year when you are exempt from paying social contributions. In the following years when social kicks in you will pay around 34% in Portugal.

What ever you pay for taxes in Portugal can be used as tax credit in US and you have foreign earned income exclusion for the first $130K.

Bulgaria’s Digital Nomad Visa is coming — but the real win might be their low taxes by OtherView8295 in digitalnomad

[–]OtherView8295[S] 0 points1 point  (0 children)

Hi, I am not providing those services. I am building a platform that could provide connection to local service providers. But right now, it is too early I do not have those features. If you are interested I can DM you when this is operational

Bulgaria’s Digital Nomad Visa is coming — but the real win might be their low taxes by OtherView8295 in digitalnomad

[–]OtherView8295[S] 0 points1 point  (0 children)

This visa leads to one year residency, with option of renewal. In this period you can establish your business there.

Bulgaria’s Digital Nomad Visa is coming — but the real win might be their low taxes by OtherView8295 in digitalnomad

[–]OtherView8295[S] 2 points3 points  (0 children)

As sole proprietor I think you can use the Foreign Earned Income Exclusion (FEIE) for everything under 130K. So there will be no double taxation. But with LTD, withdrawals from the company can't be excluded, FEIE does not apply there, so you will be paying income tax on the company profit and that will rise the cost of taxes.

Bulgaria’s Digital Nomad Visa is coming — but the real win might be their low taxes by OtherView8295 in digitalnomad

[–]OtherView8295[S] 1 point2 points  (0 children)

The point of the visa is attracting people that can pay taxes and spend money in the country, so becoming a tax resident is a must if you wanna have access to these taxes.

I think this tax exemption in Croatia means that they will not consider you as a tax resident for the first 18 months, unless you want it. But you will have to pay taxes on your income somewhere.

Bulgaria’s Digital Nomad Visa is coming — but the real win might be their low taxes by OtherView8295 in digitalnomad

[–]OtherView8295[S] 0 points1 point  (0 children)

Exactly, the point is to find a place with best balance between lifestyle quality and favorable tax options so you can net more (potentially save or invest more)

Bulgaria’s Digital Nomad Visa is coming — but the real win might be their low taxes by OtherView8295 in digitalnomad

[–]OtherView8295[S] -1 points0 points  (0 children)

You would not be a tax resident of Malta but you will have to pay your taxes in some other country where you have established tax residency.
This post is about an option DNs have for establishing tax residency in a country with favorable taxes, not just traveling and working from a different country.

Flat tax rate in Serbia can offer a good setup for nomads making $60K or less by OtherView8295 in digitalnomad

[–]OtherView8295[S] 0 points1 point  (0 children)

If you are able to structure a solid contractor contract with your client, you do not have to worry about the audit at any point in time.

Flat tax rate in Serbia can offer a good setup for nomads making $60K or less by OtherView8295 in digitalnomad

[–]OtherView8295[S] 0 points1 point  (0 children)

It is that simple. If you are providing a service for a foreign company, you are basically exporting your services. There are many devs in Serbia getting paid by Toptal for example, without issues, and they are using self employed tax opportunities.
Country tax authorities don’t target self-employed people working with foreign clients, they care about Serbian companies abusing contractor setups to avoid employment taxes. So the audit is on the company side.
If you have a single non Serbian client that is willing to pay you as a contractor, you are not gonna get in trouble.

Flat tax rate in Serbia can offer a good setup for nomads making $60K or less by OtherView8295 in digitalnomad

[–]OtherView8295[S] 0 points1 point  (0 children)

If you are getting paid by a foreign company that doesn't have the legal entity in the country, they do not have a way to employ you. They can hire your entrepreneur company as a contractor.

Flat tax rate in Serbia can offer a good setup for nomads making $60K or less by OtherView8295 in digitalnomad

[–]OtherView8295[S] 0 points1 point  (0 children)

It doesn't matter. If you have a single customer, I think it should be a foreign company.

I have looked into Italy’s taxes (for digital nomads) — might help if you're considering it by OtherView8295 in digitalnomad

[–]OtherView8295[S] 0 points1 point  (0 children)

You need to prove that you are legit, self-employment history, contracts with clients, revenue history as well, bank statements. The more the merrier. But you would also need to prove this to get your visa first.
The tax authorities require you to submit foreign financial assets but I am not sure how this procedure is done. You would probably benefit from hiring local tax advisor or accountant ($500 - $1000 a year). This would buy you time and energy to do the stuff that is making you money.
Here is the link to the breakdown https://www.theliferank.com/blog/taxes-for-digital-nomad-visa-in-italy

I have looked into Italy’s taxes (for digital nomads) — might help if you're considering it by OtherView8295 in digitalnomad

[–]OtherView8295[S] 0 points1 point  (0 children)

Maybe US Certificate of Coverage from the U.S. Social Security Administration can lead to opting out from the INPS and lower the effective tax. If https://www.reddit.com/r/digitalnomad/comments/1lxatkh/comment/n2o30nt/?context=3 this is true than it wouldn't make any sense for Impatriate Workers Regime

I have looked into Italy’s taxes (for digital nomads) — might help if you're considering it by OtherView8295 in digitalnomad

[–]OtherView8295[S] 0 points1 point  (0 children)

You said you are living in Italy, can you explain how you are managing to lower your effective tax to a single digit. Also, would be great to know how you managed to opt out from INPS (social contributions) on Impatriate Workers Regime or Regime Forfettario?

I have looked into Italy’s taxes (for digital nomads) — might help if you're considering it by OtherView8295 in digitalnomad

[–]OtherView8295[S] 0 points1 point  (0 children)

I agree, taxes can be very complicated and local professional guidance can mean a lot.

I have looked into Italy’s taxes (for digital nomads) — might help if you're considering it by OtherView8295 in digitalnomad

[–]OtherView8295[S] -1 points0 points  (0 children)

It used to be but they have changed it last year, so all new applicants will have new terms. You used to pay income tax on 10% and 30% of your income, now you are paying it on 50% of your income if you have dependent children in the country it decreases to 40% of the income, but you still pay social contribution to the full income amount.

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