If you want to work as a self-employed entrepreneur in Portugal, then the choice between the simplified accounting regime and the organized accounting regime will come up at a certain moment. This is one of the most important criteria to consider when deciding as a self-employed worker : the deduction of expenses and charges related to your self-employment activity like internet, computer, meals or even Uber ride. Indeed, the choice of accounting when you work as a freelancer in Portugal influences the tax base, in other words the amount of tax to be paid. What are the deductible expenses as a self-employed worker ? What are the charges to be deducted when working as freelancer in Portugal ? Lisbob, the expatriate assistant tells you all about the deductible expenses for self-entrepreneurs in Portugal.
What are the expenses and charges deductible from income tax as a freelancer in Portugal ?
Deductible expenditure and simplified scheme in Portugal
The simplified accounting system is the most common option for taxing the income of self-employed entrepreneurs and freelancers (self-employed), which is assigned by default by the Portuguese tax authority at the beginning of the activity. In this scheme it is not possible to deduct expenses related to the activity. Indeed, the tax authorities of Portugal consider that 75% of the revenues obtained are actual cash inflows and that the remaining 25% correspond to expenses (if the activity is a trade, hotel, restaurant and / or debitant drinks then the taxed percentage is 85% of the income). However, there are fewer tax obligations and additional fees. Also, if you reach more than 50.000 euros turnover in a year, you will be automatically assigned to organised accounting system.
Deductible expenses and an organized accounting system
The organized accounting system is the most advantageous tax status for the self-employed with a more complex activity or when the expenses related to the activity exceed 25% of the income. Indeed, this plan makes it possible to deduce the general expenses and the professional expenses related to the activity. Lisbob has listed for you all the expenses that are deductible from your accounting fees organized in Portugal :
Expenditures related to the car for professional purposes and the respective expenses (fuel, travel, among others);
Meals taken in the work area;
Subsistence expenses if absent from work;
Computer equipment costs;
Acquisition of raw materials;
Agreement with a certified accountant;
Fines, where there are offenses;
Expenditures related to the physical workplace, such as maintenance and restoration, rent, bills, bank loans;
You must therefore pay careful attention to all your costs and expenses related to your business and calculate whether it is more advisable for you to be in simplified or organized accounting. While this may not be your only decision criterion, the way you are taxed greatly influences your success as a freelancer in Portugal.
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