A 75% tax shock! (And a lesson in how NOT to communicate with clients)
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...
Posted Using LeoFinance Beta