# 183 day tax rule ambiguity?



## portugaldreaming (Jul 10, 2016)

Hello, I have moved to Portugal and intend to live here for less than 183 days per year - partly because I travel extensively and partly due to no requirement to pay tax. At least this is my initial choice in my first year here while I decide on the other options of tax residency, non-habitual residency etc. I am also still self employed working which I will discuss in another email regarding Australian pensions.

I have a bank account, tax number and residency card. I have also entered into a private lease agreement on an apartment for 6 months, which I do not intend to keep when I leave before the 183 period is up.

I have a question around the ambiguity of the definition of the 183 day rule, where it says: 

"You're considered tax resident in Portugal if:
o	you lived there for at least 183 days (consecutive or not) during a tax year or
o	*you lived there for less than 183 days but on 31 December of the year in question, you had a house/flat in a condition that suggests you intend to maintain and occupy it as your usual residence.*"

I have bolded this latter sentence as the ambiguous bit: Does it mean that if I have a rented apartment at the time of 31 December (which I intend to leave by April), that I am liable to tax for the 12 month period? My understanding is NO, but am looking for confirmation on this. 

Thanks for your attention.


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## Bevdeforges (Nov 16, 2007)

I'm not sure about Portugal's specifics regarding residence (for tax purposes), but in general terms for an "international" situation like what you're describing, you may well be considered to be "tax resident" in any country where you have your primary home and/or your "centers of interest." These terms are not strictly defined, but depend on the facts and circumstance of your situation.

In some cases, even if you spend less than 183 days in a country, if it's where you spent more time than anywhere else, you may be deemed "tax resident."

It may come down to where you have the bulk of your personal possessions (especially on December 31st, from the part you've quoted) or if you return to the place repeatedly (i.e. year after year).

Being "self-employed" through an Australian business can also cause problems, as many countries consider you to be working in whatever country you are physically located in while doing whatever it is you are remunerated for doing.

Not saying any of this applies to Portugal specifically, but if there is a question about what country you are tax resident in, these are common international issues that may come up.


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## portugaldreaming (Jul 10, 2016)

Bevdeforges said:


> I'm not sure about Portugal's specifics regarding residence (for tax purposes), but in general terms for an "international" situation like what you're describing, you may well be considered to be "tax resident" in any country where you have your primary home and/or your "centers of interest." These terms are not strictly defined, but depend on the facts and circumstance of your situation.
> 
> In some cases, even if you spend less than 183 days in a country, if it's where you spent more time than anywhere else, you may be deemed "tax resident."
> 
> ...


thanks for your other PM. Well according to what they widely state, you are not liable for tax if you stay less than 183 days. If however, you have a permanent rented apartment or own house/land, then you are considered tax resident, whether you are here for less or more than 183 days.

Someone like myself would not be continuing a lease if I left before the 183 days, but I would put my car and belongings into hired storage somewhere.

I was thinking of going away for a few weeks holiday before Dec 31, but will return.
I am no longer an Australian tax resident, I filed a final return.
Appreciate your response!


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## Bevdeforges (Nov 16, 2007)

One other thing to consider is the difference between the "anglo-saxon" view of law vs. the European approach.

In most English speaking countries, the laws have to be written very carefully because the government tends to rule by a literal interpretation of the laws as they are written. In most European countries, there is more attention to the "intent" of the law as written, so that the 183 day thing may well be interpreted to mean "where you spend the bulk of your time" or where you have your personal interests, even if your lease only runs for 120 days or so.

Again, I don't know about Portugal, but it's something you should perhaps consider when arranging your affairs.


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