Living in Portugal and working remotely in another country for one or more foreign companies is an increasingly common situation.
If you work remotely for a foreign company, it is important to know your tax and social security obligations.
If you have a Portuguese tax address, you will have to pay taxes on your income in the country where you live, even if it is earned abroad.
However, in order to avoid double taxation, Portugal has established a network of agreements with other countries that allow people not to be taxed in their country of origin. This ensures that you are not taxed twice on the same income.
How do I declare this income to the IRS?
You have to fill in IRS Form 3 and Annex J, where you will have to indicate your gross income, as well as your social security contributions and the tax you paid in the country where you are (or were) working. Only in this way can the tax authorities determine whether you are entitled to a tax credit for international double taxation.
