Seeking to Reduce Tax on American Income While Staying in Home Country (Portugal)

[Venomi]

Hi everyone,

After doing some rough calculations I’ve realized that taking the standard approach to taxation in Portugal would mean giving up nearly half of my income to the government.
Naturally, I want to explore legal ways to reduce that tax burden to something more manageable. However one non-negotiable point for me is that I don’t want to leave Portugal, no moving abroad and changing my lifestyle just to lower taxes.

My Current Situation:

• I was born and raised in Portugal, and I’ve lived here my entire life.
• I prefer to continue living here fulltime.
• I work 100% remotely for an American marketing agency.
• I currently receive my income in cryptocurrency (though I could switch to bank transfers if it’s advantageous for tax purposes).
• My annual income is at least €100,000, often more.

My Goals:

• I want to ensure I’m tax compliant to avoid any future legal complications.
• I’m willing to pay my fair share, but rates exceeding 40% feel excessively high.
• I’m looking for strategies, structures, or legal frameworks that could help me reduce my tax burden without having to relocate outside of Portugal.
• I don't want the strategy to be dependent on me having to change my lifestyle

Does anyone have experience with similar situations, or could you point me toward the right types of professional advice or structures that could help me stay local while optimizing my tax situation?
What’s the smallest tax burden I can legally achieve while residing full-time in Portugal?

Any guidance or recommendations on professionals who specialize in this area would be greatly appreciated.

Thanks in advance!

 

[forward]

Under the NHR program (if not claimed in the last five years), you can live in Portugal and enjoy favorable tax treatment.
As a self-employed individual, your income may be taxed at a flat 20%, or you can structure your earnings through a foreign corporation and receive dividends at effective rates of 0%-11%.
This approach requires setting up a non-Portuguese corporation and billing your employer/business from that entity.

 

[Venomi]

Under the NHR program (if not claimed in the last five years), you can live in Portugal and enjoy favorable tax treatment.
As a self-employed individual, your income may be taxed at a flat 20%, or you can structure your earnings through a foreign corporation and receive dividends at effective rates of 0%-11%.
This approach requires setting up a non-Portuguese corporation and billing your employer/business from that entity.

Don't think that would work for me since I've been living in Portugal my entire life and the NHR program requires that I have not resided in the country during the five years prior to applying for NHR status.
Is that what you mean by "if not claimed in the last five years"?

 

[redeye]

You want to consult a local tax advisor, because, you want to keep your current situation but want a more optimized tax, so best is to consult a local advisor.

 

[forward]

Don't think that would work for me since I've been living in Portugal my entire life and the NHR program requires that I have not resided in the country during the five years prior to applying for NHR status.
Is that what you mean by "if not claimed in the last five years"?

they have not been taxed in Portugal during the five years preceding the NHR application.

 

[daniels27]

However one non-negotiable point for me is that I don’t want to leave Portugal, no moving abroad and changing my lifestyle just to lower taxes.

This is it! Exactly this makes governments so greedy. They know the majority does not want to leave. It basically is the opposite of a free market as too many market players have huge constraints.

 

[Venomi]

they have not been taxed in Portugal during the five years preceding the NHR application.

If I've never filled taxes before but my tax residence is Portugal since I've been living here all my life does it count as me being taxed in Portugal?

 

[drysponge]

"Don't like German tax? Don't live in Germany. Simple as that."

is your income solely personal income? are you an employee?

 

[Venomi]

"Don't like German tax? Don't live in Germany. Simple as that."

is your income solely personal income? are you an employee?

Yes, my income is derived from commissions earned from running advertisment campaigns for a Marketing Agency so all of it should be considered personal income. And I'm not an employee but was hired as an independent contractor.

 

[diro]

If I've never filled taxes before but my tax residence is Portugal since I've been living here all my life does it count as me being taxed in Portugal?

How do you managed not to pay taxed in Portugal before? I don't know with them, in other countries there are many ways governments and tax offices can trace where you live.

 

[drysponge]

should be considered personal income

when you say it *should*, that you have never filed taxes & that you're paid in crypto, has that been going on for a long time(over 1 year)? is this crypto in a custodial or non custodial wallet?

if your income is simply self employment, theres no structuring to be done(not at 100k/yr atleast imo), go see a local tax advisor / accountant and decide how liberal you want to be with deductions.

get on a plane.