Remote Work Tax Portugal

Assess your remote work corporate tax / Permanent Establishment (PE) risks in Portugal

Are you planning to hire in Portugal?

Launching a remote work policy?

Have your employees already spent time working in Portugal?

Or are you wondering whether you should approve a future trip by an employee to Portugal?

Through our remote work tax assessment, we cover all angles to ensure you remain compliant for all local regulations and avoid the costly mistake of creating PE in Portugal, which leads to corporate tax filing obligations.

How we can help

Schedule a call with our team to investigate the circumstances behind your in-country presence and resulting obligations.

Length of time. Frequency. Seniority of position. Type of work. Industry. Decision making process. Contract execution. IP generation. Data transfer.

All these things need to be considered to understand whether you create PE or have filing obligations.

Key Permanent Establishment tax risks in Portugal impacted by remote work

Under Portuguese tax law, any fixed place of business in Portugal through which the business of an enterprise is wholly or partly carried on is deemed to constitute a PE in Portugal.

A fixed place of business means a place of management, a branch, an office, a factory, a workshop, a mine, an oil or gas well, a quarry, or any other place of extraction of natural resources, and also a building site or a construction or installation project if it lasts more than six months (time period may differ considering the applicable tax treaty).

Portugal’s PE definition aligns with the OECD definition. Which means that the following situations now constitute a PE in Portugal:

  • Business activities derived from services, including consulting services, performed by an enterprise through its own staff or subcontractors hired with the purposes of carrying such activities in the Portuguese territory, provided that such activities are performed for a period or periods exceeding in the aggregate 183 days in any 12-month period starting or ending in the relevant tax year.
  • Installations, platforms, or ships in general used in prospective or exploitation of natural resources, in case the respective activity exceeds 90 days.
  • A PE may also be deemed to exist in case a person (a dependent agent), which is not an independent agent, acts in the Portuguese territory on behalf of an enterprise and, in doing so:
    • habitually has an authority to intermediate and conclude contracts that are binding for the enterprise, within the scope of the respective activitiesnamely contracts:
      • in the name of the enterprise
      • for the transfer of the ownership of, or for the granting of the right to use, property owned by that enterprise or that the enterprise has the right to use, or
      • for the provision of services by that enterprise
    • habitually concludes the contracts mentioned previously or habitually plays the principal role leading to the conclusion of such contracts that are routinely concluded without material modification by the enterprise, or
    • maintains in the Portuguese territory a stock of goods or merchandise for delivery in the name of the enterprise, even if it does not conclude contracts in respect of such goods or merchandise or have any intervention in the conclusion of such contracts.