How to avoid taxation by living on the Spanish / Portuguese border

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23 Mar 2015 14:33 by RioMino Star rating. 17 posts Send private message

First, I just wanted to point out that this posting was removed on the "expatforum" for apparently being against their economic agenda! Thank you for operating a true forum here.

If you buy your main residence property just across the border in Portugal but operate your business and spend most of your time, even have your children go to school in Spain, you can really benefit from tax avoidance under the Portuguese Non-Habitual Residency Program (where you are fiscally resident in Portugal but get special tax status there; basically, you pay no or very little income tax on earnings made outside Portugal and if you are not fiscally resident in Spain, you do not pay income tax there on earnings from your Spanish business). The Portuguese Non-Habitual Residency Program is a version of the so-called Beckhams Law, which Spain still has but has made it a non-runner for most people.

May I say that business taxation is much lower in Spain and I would NEVER operate a business in Portugal due to the obstructive nature (as I see it) of the various Portuguese authorities); operating a business in Spain is a LOT less stressful and time consuming, plus businesses pay less tax.

We have our residence in Portugal. My office is 5 minutes away in Spain (important, as the Spanish do not easily allow long distance operational directorships). I even have a "business" apartment in Spain. Our children go to school in Spain (we pay a small amount as it is a semi-private school, and an excellent one at that). I spend all my time in Spain. I drive a new Spanish BMW (owned by my Spanish business) quite legally in Portugal for private use which annoys the hell out of my Portuguese neaighbours who would have to pay 14,500 Euros more to buy the very same car. I pay Social Security in Spain so have access to their health care system (we actually have private health care insurance).

I do not want to say too much openly, but I do recommend people who might be able to move or are looking at Spain / Portugal, think very hard and do some research. Not least that having your earnings at "arms length" from the country you are fiscally resident in offers all sorts of opportunities. And, if you earn company dividends from the UK, these are not taxed at all by either the UK tax authority or the Portuguese.

Happy to answer some questions publicly, others by privarte messaging.


Legally avoiding tax in Spain, see

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23 Mar 2015 15:05 by camposol Star rating in Camposol. 1411 posts Send private message

If your centre of interests is Spain, isn't that where you should pay your taxes. The fact that your property is surely not the point, as it is in Spain where you spend most of your time.

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23 Mar 2015 16:16 by Mickyfinn Star rating in Spain and France. 1839 posts Send private message

The OP's residence is in Portugal and it's fiscal domicil residence that matters. Belgium do something similar. I would ask the OP is the 'None Haditual Residency Programme' available to ex-pats who have income from elsewhere in Europe apart from Spain? If so what is the annual time limit you can legally live in Portugal to qualify?

Time is the school in which we learn Time is the fire in which we burn. Delmore Schwartz.

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23 Mar 2015 17:35 by camposol Star rating in Camposol. 1411 posts Send private message

The house in Portugal isn't his main residence, he spends all his time in Spain, his kids go to school there, and has an apartment there.

I don't see how he can pay his tax in Portugal

Can't something be done so that people don't have to resort have this sort of cherry picking arrangement

It would be  in Spain's interest to make it more attractive to settle and pay taxes there 

I wonder how it works with IHT.

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23 Mar 2015 19:06 by bobaol Star rating. 2257 posts Send private message

bobaol´s avatar

I think this is one we've had on before. Isn't Beckham being done rather a lot of money for something like this being classed as an illegal tax avoidance scheme? If you're paying social security and have your health care in Spain, surely you'd have to pay taxes in Spain as all these schemes are linked up. (Well, my healthcard is linked to the health system and the tax system so they know how much I have to pay for prescriptions).


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23 Mar 2015 19:23 by windtalker Star rating. 1665 posts Send private message

I don't mined paying my fair share of TAX but if everyone in Spain and Portugal avoided paying TAX wouldn't both countries end up broke like Grease.Gypsy's  (pykies )live like this and they are consider as shit that don't want to pay for truck all just take everything and pay for nothing.


This message was last edited by windtalker on 23/03/2015.

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23 Mar 2015 21:58 by hughjardon Star rating in Jaywick Sands. 420 posts Send private message

hughjardon´s avatar

Idiots like you ultmately cost legitimate Tax payers like me and thousands of other law abiding citizens more go and crawl back under your stone if you were my neighbour your lovely BMW would not be so lovely anymore 


Done the Spain thing Happier in the UK

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24 Mar 2015 08:01 by johnzx Star rating in Spain. 5239 posts Send private message

RioMino     Congratulations,   discovering the perfect legal way to avoid paying taxes.

 I wonder if you would be so kind as to post your NIE so others can check out with Hacienda how we can do it too !!!


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24 Mar 2015 08:53 by Hephaestus Star rating in The Peak District Na.... 1237 posts Send private message

I've never received a receipt from the guys who clean my windows, do the heavy gardening jobs, do minor building repairs etc. I have never asked them if they declare what I pay them, if I did ask them I'm certain that I would lose their services, am I complicit in their possible evasion of tax?

Richard Branson, Lewis Hamilton, Rod Stewart and many more household names are legitimate tax exiles, Leona Helmsley famously said "Only the little people pay taxes". 


I'm Spartacus, well why not?

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24 Mar 2015 10:03 by Mickyfinn Star rating in Spain and France. 1839 posts Send private message

I see nothing whatever wrong with legal tax avoidance. That said I think illegal tax evasion is a crime and should be dealt with. In this case the OP is doing nothing wrong. He’s simply using a systemic process for his own benefit. If Portugal thinks it’s wrong they should change it.

Usually these taxation schemes are put in place by governments to attract outside investment and to stimulate sectors of their economy. If people take advantage of them, eventually the country benefits in some way or another. Cross boarder competition between EU states is also an effective method of economic stimulation and incentive. Life is not a level playing field

Time is the school in which we learn Time is the fire in which we burn. Delmore Schwartz.

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24 Mar 2015 13:38 by RioMino Star rating. 17 posts Send private message

Hello Guys

Your primary residence is the key test as to where you are fiscally resident. If your children go to school in another country, as long as their school shows them as being resident in the country of your primary residence, there is no issue there. Only social security is charged where you earn the money if you or perhaps your family group as a whole are fiscally resident in another country. The general rule with the Portuguese non-habitual residency scheme is that you do not pay income tax on earnings made outside Portugal where the national authority in that other country ordinarily but for whatever reason chooses not to tax you. It gets sticky where you are not resident in the place you have your business but, there are ways (think having an apartment in Spain and only yourself being resident there, and think about where you are legally deemed to have slept at midnight, a key determinator in where you are fiscally resident, if you cross the border from Portugal into Spain each night after 23:00 but before 24:00 Portuguese time - think about the time difference with Spain and Portugal). For example, if you are the director of a UK company and only get paid dividends and have been declared non-resident by HMRC, the UK does not effectively tax you on those earnings, and nor does Portugal (under the noted scheme). What is more, under EU rules, you can work from your home (in this case, in Portugal) for your UK / ES whatever business without being deemd to be working in your place of residence.

As I said, I am not willing to post every facit of the fact here publicly. I certainly am not publishing my Spanish NIE or Portuguese contribuant number! I would recommend that you do your own research. As for the jealous responders; it is not my fault that you failed to perform due diligence before you set up where you did, is it? Rather than make hate reply postings, look in the mirror.

What I will say / recommend is;

1) Look up "Portugal non-habitual resident regime / visa" on Google and pay particular attention to the large western accountants and what they have to say.

2) Look up "cross border workers / company cars" on Google (especially those who clearly are best living in a mental care home). In this vein, I would also pay particular attention to what certain western accountants say about company car use in Portugal with regard to income taxable benefits; I have no intention of giving the game away publicly about how not to pay income tax on your company car, but the information is there if you choose to look hard enough for it.

3) Do not expect large accountancy law firms to give you every tax avoidaqnce there is. Do your research elsewhere.

I do not make the rules, I do not break them, I simply benefit from doing due diligence.

The Beckham Law thing (another form of non-habitual residency regime, yes) is now realy worthless; again, just do some Google searches.

My intention here was simply to set your stones rolling, so you can look at the options.

I would also recommend that anyone wishing to apply for Portuguese non-habitual residency do so through a decent firm of financial lawyers, preferably UK companies with offices in Portugal. Why? because the Portuguese tax office may well be another entity in Portugal that automatically says "No" and you may ultimately need to sue them to get the visa (the issue being that you have to become resident before you can apply for this special regime).

I would like to add, that the ONLY problem I ever had in Spain regarding my business was when UPS accidently put one of my company's export shipments on the truck to Portugal and Portuguese Customs took ages to release the shipment back to Spain (on total BS reasons) whereupon it then left Spain and out of the EU, fully Customs declared, within 24 hours as it should have done. Truly, never try to operate a business in Portugal.

PS My home in Portugal, my office in Spain, my apartment in Spain, and the school my children attend are all within 15 minutes from each other.

This message was last edited by RioMino on 24/03/2015.

Legally avoiding tax in Spain, see

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24 Mar 2015 15:38 by johnzx Star rating in Spain. 5239 posts Send private message

Having read this again,  I understand the OP resides in Portugal, I have no knowledge of Portugal’s tax laws, so if he is legal,  good luck to him.

For myself, I am very happy living in my part of Spain and would not opt to move away from where I happy,  to anywhere,  to save a few bob (even if that was quite a lot)

I am though just a little surprised this was  posted in Eye on Spain.  Does anyone living in Spain care about Portugals' laws.?

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24 Mar 2015 18:37 by camposol Star rating in Camposol. 1411 posts Send private message

Obviously, if it means they pay much less tax!

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25 Mar 2015 09:34 by Roly2 Star rating in Almeria. 651 posts Send private message

I am puzzled too.  How many people using Eye on Spain realistically could use this Portugese tax loophole?

Another of example of look at me I am so clever.    And as long as you are legal, that's ok, isn't it?    Isn't that what all big time tax avoiders say?    The really intersting question is, is it ok?


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25 Mar 2015 13:51 by Roly2 Star rating in Almeria. 651 posts Send private message

This is a fairly easy to follow account of this, if anyone wants to make use of it:


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25 Mar 2015 15:13 by RioMino Star rating. 17 posts Send private message

Sorry there are embittered people about my post; rather than it being about my boasting, maybe you should consider jealousy on your part? My post was not for everyone; not those with roots in another part of Spain who can / will not move. It is relative to Spain, as I have stated, that is where most of my life is; I just have my fiscal residence across the border. The post was and is for people considering becoming an expat in Spain, and for existing expats in Spain who might be tempted to move for money's sake. As for not wanting to move to a border area with Portugal, I doubt any of you can boast the beauty of the Rio Mino valley area of Galicia. With 20 minute drive access to Vigo, Europe's largest fishing port, the food, shopping and standard of life here is pretty unsurpassable too. Plus, I get the best of two countries, not one; I even enjoy the drive down to Porto airport (we have a small regional airport in Vigo) along one of the most spectacular motorway drives in Europe (as Jeremy Clarkson would point out, paid for with EU money). The thing is, people tend to flock to expat areas well within Spain, which is not always the best option. Border areas somehow being less desirable (I guess some kneejerk fear the neighbours may invade). So my post should be taken as a small vote and reason for looking around some of the less expaty / border areas if nothing else.

Legally avoiding tax in Spain, see

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25 Mar 2015 18:49 by Roly2 Star rating in Almeria. 651 posts Send private message

 I quite like the Tavira area, but I won't be moving there.   I am happy to pay my tax - only disappointed that the Spanish are so very bad at collecting tax fairly.   But I did put up a link so that people could see if it was for them.   How do you get past the 180 day requirement to live in Portugual if you have your kids in Spanish schools and are hardly ever there?

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25 Mar 2015 22:02 by Rossetti Star rating in Oxford and Zurich. 125 posts Send private message

Rio, good post that provides information that's new rather than the usual 'where can I get ...' or 'How do I ....' posts.


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26 Mar 2015 08:49 by Hephaestus Star rating in The Peak District Na.... 1237 posts Send private message

This forum tends to be very cliquey, anything not of the norm is liable to be questioned. I have often wondered about the mechanics of border hopping (working on one side and living on the other), It happens within the UK, but the four entities of the union have a single tax system, I wonder if there are any advantages in border hopping in Ireland.

As previously said, a very interesting post. yes 


I'm Spartacus, well why not?

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26 Mar 2015 10:31 by johnzx Star rating in Spain. 5239 posts Send private message

Roly:   Another of example of look at me I am so clever.    And as long as you are legal, that's ok, isn't it?    Isn't that what all big time tax avoiders say?    The really intersting question is, is it ok?


Good point Roly. 

I expect most would consider Starbucks, Apple, and others's, ' flexibility '  to avoid tax, although legal is sharp practice, as someone must pay for the services which the tax avoider will enjoy. 

Maybe it would be better of there were no legal loop holes and then maybe everyone would pay their share.

At present it is probably the poorest who are less able to avoid taxes, and thus pay on income per head pay the highest tax, which of course including VAT / IVA.

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