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Payment from Portugal to UK resident-double taxation
Thread poster: Abigail Elvins

Abigail Elvins  Identity Verified
Portugal
Local time: 10:12
Portuguese to English
Jan 23, 2008

Dear All,

I'm fairly new to all this so was delighted to do some translation work for an agency based in Portugal last October. The agreed payment came to about 500 euros.

As time went by and no payment was forthcoming I emailed them and was eventually told that as I was a UK resident, in order to avoid double taxation (ie them taking off 25% of my earnings before paying me) I would have to fill in a form and get it stamped by the tax office. The form showed my address and the amount of money I had earned. I got this stamped at the beginning of January.

Now the agency have said that the legislation changed on 31st December 2007, so if the form was stamped after this date, it would be of no use and I would have to do something else - presumably fill in a different form. They haven't told me yet.

I wanted to ask if any of you have come up against this, either with a Portuguese agency or one in another EU country. What is this new legislation? Is the agency just stalling, do you think???

Thanks for reading - any advice/insights/suggestions gratefully received!!

Abi

[Edited at 2008-01-24 12:50]


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Ivana de Sousa Santos  Identity Verified
Portugal
Local time: 10:12
French to Portuguese
+ ...
Payment from Portugal to UK resident-double taxation Jan 24, 2008

Hello Abi,

I've been following your post since yesterday and saw nobody gave you a clue about your doubt.

I don't even know the answer to your question, but I can tell you that yes, some legislation related to fiscal issues inside companies has been introduced, but I don't know exactly what changed (I can get informed though).

However, I don't think it has something to do with double taxation issues.

Let me search and ask some questions...


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Sabine Akabayov, PhD
Israel
Local time: 12:12
Member (2011)
English to German
+ ...
Ask your local tax authority Jan 24, 2008

Hi,

I was asked by an agency in Spain to get a form stating that I'm paying taxes in the US.
I didn't get it, since it would have cost me more than the actual job was worth.
But there is probably a tax treaty between your countries to avoid double taxation.
I would ask the local tax authority what to do. Maybe you wont have to pay taxes on this job if it was already taxed in Portugal.
I will get a statement form this agency in the end of the year stating the taxes I payed in Spain, so I will include that in my tax return here in the US.
I always call the tax authority for questions and they always helped me so far.

Sabine


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Post removed: This post was hidden by a moderator or staff member for the following reason: Please remove the expression "dark and perfidious". Thanks
Post removed: This post was hidden by a moderator or staff member for the following reason: Please remove the expression "dark and perfidious"
xxxPerereinger
Local time: 11:12
You welcome Abi Jan 26, 2008

...and apologies for Microsoft's mangling of your name in my initial response only picked it up after pasted and posted.
Ken


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accents_ie  Identity Verified
Local time: 10:12
English
+ ...
Tax Jan 27, 2008

Foreign agency just must to pay your invoice in full.

It is YOUR OWN obligation to declare your foreign (any) income to your Tax Office in your county - it is not their business.


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Abigail Elvins  Identity Verified
Portugal
Local time: 10:12
Portuguese to English
TOPIC STARTER
Couldn't agree more! Jan 27, 2008

Yes, I quite agree. I didn't expect to have to convince them of this when I accepted the work!
I think the Portuguese tax authorities are concerned with ensuring that I am resident in the UK and not Portugal, rather than with my income, but they have a strange and tortuous way of going about it.
I have written a very polite but firm email to the agency asking them (again) to send further instructions - until they do my hands feel tied.

Thanks to everyone for all their help and suggestions!
Abi


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xxxPerereinger
Local time: 11:12
Dont think you will get far with the agency Jan 28, 2008

Abi I may be wrong but I doubt the agency will be able to help, they would depend on their local tax office for advice and as I have said, local tax offices are chaotic.
I agree with accents_ie - it is a taxpayers' obligation to declare worldwide income in his own jurisdiction and Portuguese Inland Revenue has nothing to do with this when double taxation arrangements are in place.
The best approach I believe is to seek help from the UK tax authorities and clarification from the EU, as the Portuguese are evidently in breach of single market directives.
They need to be forced to row back.
(The context for the 15% retention is that for more than two years they have been embarked on a tax collection crusade, which verges on an inquisition, in a desperate effort to bring the national budget deficit below the 3% line to which EU member states are committed. Unwilling to fire redundant civil servants whose wage bill is the reason for the deficit, they persecute the taxpayer and now non residents as well.)
Ken


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Abigail Elvins  Identity Verified
Portugal
Local time: 10:12
Portuguese to English
TOPIC STARTER
Great - will get on the phone to the tax office! Jan 28, 2008

Thanks Ken. I am going to try and chase it up, although I have to say my local tax office were completely at sea on this issue. I'll have to speak to someone more central I think.
Cheers


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Abigail Elvins  Identity Verified
Portugal
Local time: 10:12
Portuguese to English
TOPIC STARTER
Great eu website for taxation queries Jan 28, 2008

Hi,
Have made some phone calls but no one here at the tax offices could help me at all - as far as they are concerned my income is nothing to do with Portugal, of course.

Then decided to stop wasting my money on 0845 numbers and go on the eu website. I eventually found what I was looking for - a way of submitting a query to some eu legal experts on matters of taxation. They promise a reply within 8 days.

The website is, without the www:
ec.europa.eu/citizensrights

Thanks
Abi


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Abigail Elvins  Identity Verified
Portugal
Local time: 10:12
Portuguese to English
TOPIC STARTER
New form replacing MOD.12-RFI Jan 28, 2008

Hi,
The agency have now told me there is a new form MOD.21-RFI which is similar to the previous one but does not include details of income and is valid for one year from the date of authentication by the UK tax authorities. I guess I'll have to fill it in but I'll wait for the reply from the EU legal experts first!
Abi


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Katarina Lindve  Identity Verified
Sweden
Local time: 11:12
English to Swedish
+ ...
Me too Apr 17, 2009

I could tell you the same story but two things alerted me : 1) money was not paid in time and I needed to send an e-mail BEFORE they asked about the form. 2) no other country within the EU (or outside) has asked for nything else but the VAT.

As Sweden, where I am working, only demand that I have the VAT of the company on my invoice and the address, the same should go for all other countries as we in the EU have the same terms. We are to be like one country. The same rules shall apply to all (I have studied EC-law).

I have now asked the tax authorities to help out.


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Teresa Borges
Portugal
Local time: 10:12
Member (2007)
English to Portuguese
+ ...
Abigail Jan 4, 2010

Could you please let me know how your problem was solved ? I have a few regular Portuguese clients (both agencies and direct clients) and none (until now) had asked me for this form... There is always a first! Thanks in advance,

Teresa


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pearson
English to Portuguese
21-RFI form May 16, 2011

Hi
as anyone solved this issue yet? I was also asked to provide this form and I don't know what to do, I am not sure if it applies to my circumstances.

I found some information in a UK government site and from what I undersatnd, it only applies to someone who has a fixed base. I assume that "fixed base" means an office, shop or similar. I work from home as most translators do, so I wonder if this form that the Portuguese authorities are asking for applies to us freelance translators. My interpretion is that the tax is withheld in Portugal because that's where the service is being provided to. Here is what I found:

"DT15663 - DT: Portugal: double taxation agreement, Article 14 Independent personal services


(1) Income derived by a resident of a Contracting State in respect of professional services or other independent activities of a similar character shall be taxable only in that State unless he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities. If he has such a fixed base, the income may be taxed in the other Contracting State but only so much of it as is attributable to that fixed base.

(2) The term `professional services` includes, especially independent scientific literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants."



[Edited at 2011-05-16 09:46 GMT]


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