# US/Portugal tax double nationality questions



## TBjockNY (Jan 9, 2012)

Hello,

I have some questions as far add taxes go in retard to having Portuguese and American nationality. (going through.process of getting PT nationality) both father and I are American born and raised.

My fathers concern is the tax rules that come with double nationality so here's our situation

Father- no property, work, or income in Portugal whatsoever. He only wants to be able to visit. job is US based company, only works in US, has one house in US. Income only in US.

Myself- I own nothing apart from a car and have a modest savings account. Same as my father I have never worked or lived in Portugal.

-might anyone be able to point me in the direction of some knowledgeable
contacts to talk to about this as well?

- Portugal cannot tax us on any income not obtained in their country correct?
-we would be considered American for tax/residence purposes correct?
-what Pottuguese tax forms would apply to us?

I am a bit unclear as too this part, so want to make sure there are no surprises !


----------



## Bevdeforges (Nov 16, 2007)

On what basis are you taking Portuguese nationality? Normally you have to have lived in Portugal for some period of time or have blood relation ties to the country (parents or grandparents).

Normally, you pay your income taxes to the country in which you are resident. It's only the US that insists on taxing all its citizens, no matter where they reside.

So, in short, you will forever and always have to file a tax return with the US. If you're residing and working outside the US for a solid year or more, you should be able to take the Foreign Earned Income Exclusion to avoid US taxes on your salary income. 

If and when you take up residence in Portugal, you will fall under Portuguese tax laws. At that point, any income taxes you pay in Portugal can usually be taken against your US income tax obligation as "foreign tax credits" - but things can get complicated if you have income sources in multiple countries.
Cheers,
Bev


----------



## TBjockNY (Jan 9, 2012)

Through my granfather, we are applying on descent. Thank you for your quick response. I knew about US law, but was not sure about Portugal.

my father does not have any plans to work abroad only visit our family in Madeira. I plan on moving eventually and permenantly which is why I have begun researching now.


----------



## BBCWatcher (Dec 28, 2012)

At present there's no tax or tax reporting liability based solely on possession of Portuguese citizenship. (Unless you count passport fees.)

Theoretically any government, including Portugal's, can change its tax laws in the future. I wouldn't lose sleep over that.


----------

