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A 75% tax shock! (And a lesson in how NOT to communicate with clients)

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@revise.leo
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Here's the exact confirmation quote my accountant sent me after I'd queried the figures they'd sent their previous email...

Being your 1st tax return in Portugal, 50% of your self-employer income is tax-exempt the other half will be taxed at 75%.

This was a real 'WTAF' moment....

To me this reads, if my income were $20K....

  • The first $10K exempt
  • The next $10K taxed at 75%
  • = $7.5K on $20K income...
  • Or around 35% income tax.

Needless to say given that this doesn't include any social security contributions which is more, that's A FUCK LOT OF TAX, and about three times what I'd pay in the UK.

HOWEVER...

According to the good people of Facebook who have been through a similar process, what that email should have said is that 75$% OF the second half of my income is taxed according to the staggered Portuguese tax bands!

So that would mean the second half of that $10K taxed at around the 20% mark rather than 75%.

So $2K rather than the shocking figure the 'slack quote' above led my mind to.

In conclusion...

If you're a tax advisor for the love of God...

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