MISTAKES TO AVOID AS AN AUTO-ENTREPRENEUR IN PORTUGAL
Moving to Portugal to work as a self-employed entrepreneur is an exciting adventure.
Since about two to three years of numerous opportunities for expatriates attracted by a freelance adventure in Portugal. The first challenge for a self-employed entrepreneur or freelancer wishing to expatriate to Portugal is above all the language. Not to mention the administrative system, which can be complicated. When it comes to important matters such as your freelance career, it's essential to avoid certain mistakes that can sometimes be very costly and put an end to your entrepreunaria project.
So that your Portuguese project doesn't end sooner than you planned. Living in Portugal Consulting has put together a list of the mistakes you need to avoid as a self-employed worker in Portugal.
VAT exemption for self-employed entrepreneurs in Portugal
As a freelancer in Portugal, you are not exempt from VAT and are obliged to collect it from your customers. However, if your customers are based in France or another country, this does not mean that you are not entitled to collect VAT. This means that you'll have to charge VAT (at the current rate) for every service you provide or product you sell.
If turnover is less than €10,000.00, a self-employed or freelance entrepreneur in Portugal is exempt from VAT.
Please note: When you declare your activity As an auto-entrepreneur, you will be asked to estimate your projected sales for the 1st year. This amount must be prorated.
No VAT return
If you do not generate any sales or issue any receipts during a given period, this does not exempt you from making periodic VAT returns. This does not exempt you from making periodic VAT returns.
In France, VAT returns are filed quarterly, so you're obliged to file your VAT return every quarter. Failure to do so can result in severe penalties, including cancellation of your business.
Failure to issue invoices correctly
The first mistake is that freelancers don't fill in invoices correctly and forget to declare VAT.
Freelancers or contractors may be exempt from VAT when they issue their invoices. However, they must indicate the article of the VAT code referring to their exemption. Failure to do so is frequent, if not constant, and can result in fines.
Some professions, such as doctors and nurses, are fully exempt. It is therefore important to find out about the conditions for exemption.
Social security for auto-entrepreneurs in Portugal
Auto-entrepreneurs in Portugal have the particularity of being able to apply for a reduction in their social security contributions (reduction in the basic base). As a result, they will have to pay lower social security contributions.
Record your expenses for accounting purposes
For simplified accountingUnfortunately, bill collection related to your operating costs cannot be deducted from your income tax (IRS).
Within the framework of organized accountingauto-entrepreneurs will be able to deduct their business-related expenses.
Don't hesitate to consult our book dedicated to auto-entrepreneur in Portugal to obtain all the information you need to set up your business and much more.