Certificate of Fiscal Residence - Completing form for freelancing in UK
Thread poster: LaraBarnett

LaraBarnett  Identity Verified
United Kingdom
Local time: 15:25
Member (2011)
French to English
+ ...
Jul 14, 2015

I have a client in Portugal asking for a Certificate of Fiscal Residence in order to receive work from them. I have found the relevant online application form on the HMRC website and some of the questions seem a bit irrelevant, and at times unanswerable, in the light of general freelance earnings. I do not know what to enter in some of the boxes and HMRC is impossible to get through to. My main issues are with the two questions:

"Please enter below the Article of the countries Double Taxation Agreement (DTA) under which your request regarding this income is being made."

"Do the Subject To Tax provisions apply to this foreign income?"

Has anybody in UK done this form? Or does anybody know what a freelance (sole trader) should enter here?


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Tom in London
United Kingdom
Local time: 15:25
Member (2008)
Italian to English
Unnecessary Jul 14, 2015

I've never been asked for one of these and I don't believe they're even necessary.

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Natalie Soper  Identity Verified
United Kingdom
Local time: 15:25
French to English
+ ...
A couple of times Jul 14, 2015

I've had to fill out these forms in my previous job. Although it was for the company and not for myself, they're still a huge palaver!

In my case the client sent me their Portuguese form to fill out, and it came with a sheet explaining what should be in each section. Could the client send you one perhaps? :/


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Rebecca Hendry  Identity Verified
United Kingdom
Local time: 15:25
Member (2005)
Spanish to English
+ ...
Yes, for Spain Jul 14, 2015

Hi Lara,

Some of my Spanish clients request this. The first time I filled out the form I left the answer to the first question you mention blank or put N/A as I didn't know what to put. When I received the certificate it came with a letter explaining which article I should put for future reference. It said:

"When requesting this certificate you did not correctly complete the box for the relevant article of the Double Taxation Agreement under which you are claiming relief on your self-employment income. This is Article number 14 - Independent Personal Services. For future requests will you please refer to the Double Taxation Agreement for the foreign country (http://www.hmrc.gov.uk/taxtreaties/in-force/) and confirm the Income Article under which you wish to make a claim. Incorrect or incomplete information entered on a request will delay issue of a certificate whilst the incorrect information is obtained from you."

OK, but I'm not sure how I was meant to figure that out by myself! I'm not sure if it helps you for Portugal but at least you know that if you leave it blank you'll still get the certificate.

I'm afraid I can't remember what I put for the second question, but whatever it was it was probably a guess!

Good luck and best wishes,

Rebecca.


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Tom in London
United Kingdom
Local time: 15:25
Member (2008)
Italian to English
Not foreign income Jul 14, 2015

LaraBarnett wrote:

I have a client in Portugal asking for a Certificate of Fiscal Residence in order to receive work from them. I have found the relevant online application form on the HMRC website and some of the questions seem a bit irrelevant, and at times unanswerable, in the light of general freelance earnings. I do not know what to enter in some of the boxes and HMRC is impossible to get through to. My main issues are with the two questions:

"Please enter below the Article of the countries Double Taxation Agreement (DTA) under which your request regarding this income is being made."

"Do the Subject To Tax provisions apply to this foreign income?"

Has anybody in UK done this form? Or does anybody know what a freelance (sole trader) should enter here?


The thing is that the income you earn in the UK, where you are resident for tax purposes, is NOT Foreign Income and the Double Taxation Agreement does not apply. It would if you were running your business from outside the UK. If you're not sure, consult an accountant. For the official definition of Foreign Income, see here:

http://www.hmrc.gov.uk/manuals/tctmanual/tctm04007.htm


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Charlie Bavington  Identity Verified
Local time: 15:25
French to English
Double taxation Jul 14, 2015

Tom in London wrote:

LaraBarnett wrote:

I have a client in Portugal asking for a Certificate of Fiscal Residence in order to receive work from them.


the Double Taxation Agreement does not apply.


Double taxation agreements apply whenever there is the risk that you, er, might be taxed twice.

The swiftest of swift googling suggests Portugal applies a withholding tax. If Portugal deducts a tax and then HMRC deducts a tax on what's left, that is double taxation, and provisions exist to lessen the burden on the hard-pressed taxpayer.

Towards the end of this page http://www.pwc.pt/en/guia-fiscal/2014/irc/dispensa-retencao-fonte.jhtml it is strongly implied that Lara does indeed need to complete this formality as requested by her client (income from providing services, non resident entity).

The list of Portuguese taxes covered by the treaty is at the start of the this:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/412602/uk-portugal-dta.pdf

If the tax they are planning to otherwise deduct is listed in Article 2, I would answer "yes" to the second question. (Otherwise, what is the point of applying for the certificate?)
(Always with the proviso that a little knowledge can be a dangerous thing; if I were in your shoes, the above would represent my starting position - obviously you should seek confirmation from an expert source.)

[Edited at 2015-07-14 15:29 GMT]


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LaraBarnett  Identity Verified
United Kingdom
Local time: 15:25
Member (2011)
French to English
+ ...
TOPIC STARTER
Thank you Jul 14, 2015

Thanks to you all for your help. I have used everybody's information and sent the form off now. I can only wait and see what happens next.

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Certificate of Fiscal Residence - Completing form for freelancing in UK

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