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Portugal Clarifies Tax Rules for Remote Workers in 2023
Portuguese Tax Authority guidance issued on 28 August 2023 clarified that income earned from foreign employers while physically in Portugal is generally taxable in Portugal under territoriality principles.
On 28 August 2023, the Portuguese Tax Authority issued administrative guidance published in the Diário da República clarifying how remote work arrangements are taxed when performed from Portugal for foreign employers. The guidance responded to the rise of remote workers entering Portugal under the D7 and digital nomad visas.
The clarification confirmed that income earned from foreign employers while the taxpayer is physically located in Portugal is generally taxable in Portugal under the concept of territoriality, unless a specific double-taxation treaty provides otherwise. The guidance also outlined documentation requirements for declaring foreign-source employment income.
For digital nomads and remote workers from the US, UK, Canada, Brazil and Israel, this clarification is essential. Many had assumed that income from foreign employers would automatically escape Portuguese taxation. The 2023 guidance emphasises the need for proper tax planning, careful analysis of tax residency rules and, where applicable, use of double-taxation agreements.
The publication underscores Portugal’s intention to balance the attractiveness of remote work visas with fiscal coherence.
Official source: Diário da República, Tax Authority administrative guidance, 28 August 2023 (https://dre.pt)