Why Portugal cannot pay it debts
Portugal has a big problem.... rotten bureaucracy
I am an Australian who is working as a freelancer in Portugal. I work primarily for an Australian company. In other words in terms of economic benefit for Portugal I remove money from Australia and spend it in Portugal. For me it is great because I am earning a decent wage (hard to do in Portugal). For Portugal it is great because more money if flowing through their economy.
The biggest problems I have faced over the 18 months, that I have been here, have come from the tax and social security systems.
Don't get me wrong, I want to pay tax and I want to put money into the Portuguese social security system.
The problem is how hard it is for a person to do that. I registered for "recibos verdes" (i.e. the freelancer system). All fine and dandy, the people in Finanças even tell me because I am a new tax payer I get a year free of paying tax. Because I am doing most of my work for a non-EU company my income would be exempt from VAT and my declarations would be pretty straight forward. So far, so good. I am doing a VAT declaration each 3 months, every time struggling with the legal "lingo" on top of an already difficult language.
So my 12 months of beginners tax-free living is over and now I am supposed to start paying income tax and supposedly some social security. In April I will fill out my income tax declaration for last year and I will not have to pay anything. For this year I will have to save my own tax payments as I earn money and pay it when it comes to tax time next year.
However the social security department is the hardest department to get any information out of, people start lining up an hour before the offices open. Reading their instructions in Portuguese are ridiculously difficult even for a native speaker. I am currently trying to find out if I have to start paying this monthly fee now or in October (I swear it says both). I have received requests for basic information from the department, most of which they already have copies of and some of which I don't even know. They have asked, for example, for my social security number, which they have not given me yet.
It is no wonder the Portuguese economy is in the toilet. Why are there proposals to reduce pensions when they don't even have a decent system to receive tax? With electronic citizen cards they can authenticate people, allow them to enter the information required and then give that data to a bureaucrat who can then contact that person with an answer, all without having to line up for hours and hours just to be told that the office is closing and you might have better luck tomorrow.
1 Comment
Nice to read your article. I'm undergoing the exact same experience right now...bureaucracy overload. I even had to go back to finanças to specifically ask for my VAT-number to be valid for intracommunautarion work, which in a common market is ridiculous. It's like getting a bank card and then having to sign a paper to be able to pay with it...incredible.
But i was wondering, how did the first tax filing go? Iis it true that you can only have 30% of costs as a freelancer (recibos verdes)?? And how did the social security payment go? Do you thin it's a lot or not?
Kind regards,
Stijn
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