Tax minimization in Portugal is an effective tool adopted by numerous companies that want to reduce tax contributions in a legal manner. Tax minimization is considered a proper and legal way to maximize the incomes of a company, and also of high-net-worth individuals. Our company formation specialists in Portugal can offer support for all interested persons in tax minimization in Portugal and necessary guidance once such a financial tool has been adopted.
Tax minimization methods in Portugal
Any company in Portugal needs a suitable tax plan to help them avoid the overpayment of fees. In this matter, the VAT, the withholding tax, the income and corporate taxes, and some of the main fees a company deals with, should be attentively analyzed. Another tax minimization method you can adopt is related to the income tax on salaries of personnel which can be reduced if several social contributions are paid by each employee under a strict convention signed in this matter.
The same tax minimization tool can also apply to gifts, bonuses, office supplies or several subscriptions of a company in Portugal. Tax deductions can be obtained once you set up a foundation in Portugal, an important tool considered by many entrepreneurs from abroad.
Furthermore, the repatriation of profits can be subject to fiscal optimization, as part of the tax minimization method. It is good to know that each saved money due to a tax minimization procedure can be invested in diverse areas, whether in the company’s different sectors or abroad.
We remind you that company formation in Portugal is an easy process that can be done within a few days. Complete guidance and information in this matter can be offered by our company formation agents in Portugal. The same team can help you set up a company in Portugal, in respect to the legislation in this country.
Tax minimization solutions and investment opinion
We strongly recommend the services offered by our tax specialist in Portugal if you want your finances to be coordinated from a tax-efficient point of view in Portugal. Investment strategies can be offered for those interested, such as:
- Dedicated investment portfolios depending on the situation and the financial aspects you present. A risk profile can be drawn up before any strategy.
- We collaborate with experienced investment managers and tax advisors who can offer optimal solutions for those interested in investments, but also in efficient tax minimization tools.
You can ask us about company incorporation in Portugal if you decide on investments in this country. Our specialists are at your disposal with information about formalities and procedures.
Tax reduction for investments in equipment
You can benefit from reduced taxes if you invest in new equipment in a company registered in Portugal. There are schemes with the help of which, foreign entrepreneurs can opt for tax reduction for the technology and equipment brought to the company. Such investments are usually long-term, and if you are active in the research and development sector in Portugal, you can also benefit from other tax reductions. We still recommend that you contact our tax advisor and discover which tools are suitable to cut the amount of taxes in the firm.
Paying loans in advance, a good tax minimization tool in Portugal
Another method by which you can reduce company costs, especially those related to taxes, is paying loans in advance. Thus, if you pay a larger amount to cover several installments, you can benefit from reduced taxes and thus direct your attention to the necessary investments in the company that you may have postponed.
Tax benefits for UK retirees in Portugal
If you want to relocate to Portugal as a pensioner from UK, you should know that you can enjoy several tax benefits, as follows, taking into account the tax agreement signed by Portugal and the UK:
- Taxation is done on UK pensions in Portugal. You must provide proof of residence permit and source of income.
- Pensions are subject to a 10% tax rate for the first 10 years of living in Portugal, due to the NHR or non-habitual residency scheme in Portugal. If you are not part of this scheme, taxes can reach somewhere around 48% of personal income, respectively pension.
- The pension in UK can be transferred to a Qualifying Recognized Overseas Pension Scheme or QROPS to release the tax-compliant prospects in Portugal.
We recommend our company formation agents in Portugal to find out as much information as possible about tax minimization options as retirees from UK to Portugal. We will find the best solutions for you from a tax point of view to make a favorable decision regarding your financial situation. On the other hand, tax minimization options can be recommended to those who want to open a company in Portugal.
Why invest in Portugal
Considered “Best Tourist Destination in Europe” 6 times in a row, Portugal attracts many foreign investors in tourism, real estate, and transportation, among other sectors of interest. Those who want to start a company in Portugal can discover the following interesting information:
- In the period 2021-2022, Portugal increased its confidence by approximately 67% as a popular place to invest.
- An economic growth of approximately 6.7% was recorded in Portugal in 2022.
- Economic growth of up to 2% is estimated for 2024.
Some details about taxes in Portugal
Even though the taxation system in Portugal is complex, it comes with special rights for both citizens and foreigners established in the country. It is good to know that non-residents in Portugal are subject to a 28% tax rate for capital gains and 25% as an income tax. The corporate tax is set at 21% in Portugal and in Azores Island, which is a free trade zone. As for the companies set here, these are subject to a 17.5% corporate tax rate. The tax imposed on interests, capital gains, and dividends is set at 28%, but with several exemptions in the real estate sector.
Are you interested in the services offered by the certified team of accountants in Portugal? You have full support at your fingertips from our specialists, with experience in areas such as bookkeeping, payroll, audits, human resources, and annual financial statements. We are also at your disposal with information about the most optimal tax minimization options that can be successfully implemented in your company.
If you are interested in tax minimization for your company, please feel free to contact our team of company formation agents in Portugal. We can also help you set up a company in Portugal.