Hi there,
I am Hikmat and I would like to know if profits made from forex trading are considered as capital gain or just income in Portugal? What is the tax like for forex trading there? Anyone who have a bit of knowledge on this please hit me up.
the tax issue is very important in this industry, how much you have to pay from your trading profit it depends on your country,
Hi @hikmat and welcome to the forum.
Babypips would not be my first choice of venue to ask tax questions. I have resided in seven countries and registered 3 companies in offshore tax jurisdictions in my life, so I have a little knowledge about such matters.
The answer is always “it depends”, and what that means is “it depends on the individual and five aspects of his life”, which can often be chosen or amended to minimize effective global taxation.
Country of Domicile
Country of Nationality
Country of Residence
Where your business is registered
In which country or countries you work
In which countries you intend to spend most of your time.
In an ideal world, all five will be different but not necessarily a requirement.
These are referred to as the five pillars of an international tax strategy
There is now a sixth due to the internet and subsequent creation of Decentralized Autonomous Organisation or DAOs.
This link is a good start for Portugal. Probably 95% of people don’t even think about how they can optimize their taxes in their home country, let alone think about that on a global scale.
About 30 years ago I came across a publication called Perpetual Traveller and another called The Passport Report by W.G. Hill, then proceeded to buy all of his series of leather-bound, numbered and signed books for about £1,200 at the time. They have paid for themselves many times over. Enjoy
I have been reading a lot into it and written emails to few tax lawyers on the topic and I pretty much know about how much tax and all that. I just want to know if the money earned through forex trading falls under capital gain tax or income tax, there are mix informations out there, so I wasen’t clear. Basically I want to move there and be tax resident there which will take about 6 months as I am EU citizen.
Anyway thank you for the link and the book, it will definately help.
Hi and thanks for explanation of your intent. I also have a colleague who moved there since his work can be done anywhere in the world. He is a software developer, and his UK earnings are likely to put him in the top band. Being single, he has chosen to move to Portugal and departed the UK 2 weeks ago.
The W G Hill stuff I spoke about was created pre-EU. I have provided a link to the concept of the five flags that I recommend you watch. Up until the 1980s only very rich people could do such things to mitigate against unexpected global changes. It is my opinion that since 1980, that opportunity has come to most people fortunate enough to have the right to travel freely, an accident of birth, or “where you were born”. Enjoy.
In this profession, the tax issue is quite essential; how much you have to pay from your trade earnings is determined by your country.