Tax for Freelancers in Portugal: A Case Study

INLIS Consulting
2 days ago
4 min read

At INLIS Consulting, we regularly assist freelancers with tax in Portugal, digital nomads, and highly skilled professionals relocating to the country.

One recent case we managed provides an excellent example of how careful planning and expert guidance can optimize tax for freelancers in Portugal, streamline compliance, and take full advantage of Portugal’s Non-Habitual Resident (NHR) and IFICI regimes.

Case Study: Sara Tirani

Sara Tirani, an experienced IT professional from Sweden, relocated to Portugal in December 2024. With over 30 years of experience in AI and software development, Sara began working as CTO and Head of Development for a Swedish company while establishing herself as a Portuguese tax resident. Her wife, a non-EU citizen from the Philippines, joined her in Portugal in June 2025.

Sara had several key objectives:

Register herself and her wife under Portuguese tax law efficiently.
Maximize tax benefits available to high-skilled professionals.
Set up a family-friendly structure to reduce overall tax liabilities.
Maintain compliance with Portuguese tax and social security laws while receiving income from abroad.

Step 1: Establishing Portuguese Tax Residency and NIF Registration

To start, Sara and her wife needed their Portuguese Tax Identification Numbers (NIF) and registration as tax residents. This step is mandatory for anyone planning to work, open a business, or file taxes in Portugal.

Key actions:

Verify residency documentation for both Sara and her wife.
Secure NIF numbers to allow opening of bank accounts and registration of business activity.
Ensure proper fiscal representation until permanent residency and banking setup were finalized.

Step 2: Registering as a Freelancer

Sara registered her freelance activity in Portugal under Category B (profissional independente). This allows her to invoice her Swedish company legally while residing in Portugal.

Considerations:

Monthly income: €5,166 from the Swedish company.
Family setup: Sara planned to pay her wife €1,000 monthly for video annotation work under a separate freelancing arrangement.
Business costs: Minimal running costs, primarily domains and servers.

We advised Sara to maintain proper accounting and bookkeeping for all income, expenses, and inter-family invoices to ensure tax compliance.

Step 3: Applying for NHR / IFICI Regime

With Sara’s high-skilled professional background, she was an ideal candidate for Portugal’s NHR (Non-Habitual Resident) and IFICI 2.0 regimes, which offer significant tax benefits:

Exemption on most foreign-sourced income.
20% flat tax on certain Portuguese-sourced income.
Eligibility for tax-free dividends under certain conditions.

For Sara, this meant:

Her freelance income could qualify for favorable taxation or partial exemption.
Her wife’s income could also be structured efficiently to reduce overall family tax liability.

Here’s how we helped Sara achieve these goals.

Step 4: Family Structuring

One key consideration was Sara’s wife. We recommended:

She established her own freelancer registration to invoice Sara.
Use her Portuguese NIF and bank account for transparency and compliance.
After residency, she could explore employment or freelance opportunities without needing a separate visa.

This ensures both spouses remain compliant and can optimize deductions while maintaining a legal family income structure.

Step 5: Social Security Compliance

Although Portugal offers certain exemptions for first-year social security contributions for freelancers, it is essential to understand the obligations post-exemption:

Example calculation:

Monthly income: €5,166 (Sara), €1,000 (wife)
Quarterly average: €15,498 (Sara), €3,000 (wife)
Social security contribution: 35% of 70% of the quarterly income.

This calculation ensures clients like Sara do not face fines for under-reporting or late contributions.

Step 6: Continuous Accounting and Tax Services

Sara opted for INLIS Consulting’s ongoing accounting package:

Monthly bookkeeping: invoices, expenses, and VAT declarations (if applicable).
Social Security reporting: quarterly and annual compliance.
IRS submission: annual tax filings and validation of e-faturas.
Green receipts: proper issuance for freelance services.
IFICI / NHR support: one-time application support (500€ fee, refundable in case of rejection).

Monthly fee: €80 + VAT — discounted packages available for multi-month commitments.

Step 7: Special Considerations – Stock Options

Sara receives additional compensation from her Swedish employer in the form of stock allocations. We advised:

To keep this income outside the Portuguese fiscal system via her Canadian entity.
Ensure transparent bookkeeping to avoid unintended taxation in Portugal.

Key Takeaways from Sara’s Case

Plan early: NIF and residency registration should be completed before major relocations.
Optimize family income: Spouse can participate legally in freelancing to maximize tax efficiency.
Leverage NHR / IFICI: High-skilled professionals with foreign-sourced income can greatly reduce tax obligations.
Maintain compliance: Social security and accounting obligations are critical even when exemptions apply.
Seek professional guidance: Complex situations involving multiple countries, stock options, and cross-family income benefit from expert advice.

Conclusion

Sara Tirani’s case demonstrates how a structured approach can simplify the transition to Portugal for freelancers and expats. By combining proper tax registration, freelance activity setup, family planning, and ongoing accounting support, high-skilled professionals can take full advantage of Portugal’s favorable tax regimes while remaining fully compliant.

At INLIS Consulting, we specialize in helping expats and freelancers like Sara navigate these processes seamlessly. If you are planning a move to Portugal, consider scheduling an initial consultation to explore how we can optimize your tax setup.

Contact us:

Email: geral@inlis.pt

Phone: +351 966 464 906