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Format for billing client for Security

hi again for this video I want you to join me  on how to issue Recibo Verdes online under if   your client is outside Portugal and I'll  try explaining for you so that you have   better understanding which option best suited  you if you're moving to Portugal and want to   work independently then you need to know the  green receipts as they are essential for you   to be able to carry out your self-employment  and issue invoices to your client in order to   issue Rishi go days you have to open activity you  can watch my previous video on how to register at   freelancer or open activity in Portugal it  is possible to open an activity through the   finance website online but I do not recommend this  because if you're not familiar with the portal you   will likely end up marking a wrong item and get  huge fines for having choose the wrong options on   the opening form of the activity and correcting  the registration plus the peeling for the fines   can take months to process and you can become a  regular in tax activity in Portugal so I recommend   opening an activity in person at the tax office  to avoid any mistakes in filling out the form in   addition you can take the opportunity to ask  directly any doubts you have regarding green   receipts Ava IRS and any tax relation now let's  get started we first access the finances portal   type your knife number and password and click  authenticate you can go to services and find   green receipts or REO Verdes but for now let's do  the shortcut way here in the main page we type on   the search tab fatra no you actually can't find  anything if you type in English on the search tab   so remember to type in Portuguese word if you want  to find specific item reminder I'm mostly autot   translate my page in English for non-portuguese  viewers so here let's locate emiter and click AER again if you are exercising any work as an  independent profession here in Portugal with   open activity in finances know that you need to  issue receipts for all the services you provided   even if you are exempt from collecting or charging  vat and withholding IRS at source so in this video   I will show you how to fill in green receipts and  tackle some of the vet regime and withholding tax   so here you can consult all the invoices you've  already issued or issued new invoices we are now   going to issue here we have two choices invoice or  invoice received or receipt what's the different   between them we provide a service let's say as  business consultant but I believe this is also   Al the case in the other professions we have  an obligation to issue a service invoice for   that sale within 5 days of that date on which the  service is provided or sale and not necessary the   date of issue of the invoice and will be the  same as the date of receipt of payment that's   why we have these options here in Portal if you  provide the service and receive payment at the   same time you will issue an invoice receipt but  in case youve provided a service and still have   not received payment for it you will need to issue  an invoice first within 5 days of of the date of   provision and when you receive the payment from  your customer or client you issue a receipt as   the portal explains here Below on each option  issue an invoice receipt here an issue here a   receipt associate with an invoice already issued  of which is always associated with the invoice   you've already issued but not yet been paid  this second situation happens a lot with job   and professional field with regular contract  or with project basis contract for example we   will be entitled to receive fees for providing  the service asked by your client and we issue   an invoice in the next maximum 5 days after the  service is done or after the final decision but   the payment will only be made by your company or  client at the end of the month or every cut off   of the month following the provision of services  so we will first issue an inquis and then when   we receive the payment we will issue the payment  receipt on the other hand inqu receipt is if you   provide a service and received payment on the same  time you issue sample for this is if your client   asks you to tutor is or her son for 3 hours today  and after finishing the hour asked your client   pay you the same time or day before you leave you  choose invoice receip so now that you have better   understating on this part we now move on issuing  an invoice receipt and click this in my case I   have provided a service and have already received  payment at the same time let's first fill in here   the date the service was provided then type the  document we are going to issue for my case it   will be invoice receipt since I have provided the  service and have already received the payment at   the same time here in the first option remember if  you haven't received the payment yet then you just   choose the second option and once you receive the  payment you go back on the page before this and   click receipt you will then locate the invoice  you've already issued by typing the ni number   of the client and the date you issue the invoice  and then just click that you already received the   payment it is possible to issue green receipts  without having an open activity when the income   comes from the practice of an isolated act that  is an extra income on a freelancer basis which   does not result from a foreseeable or repeated  practice now here in the first box my information   as a service provider is already filled in now  for the activity if you have more than one you   can choose which type of activity you provided for  the service you are reporting on the receipt just   select from the option here remember to declare  your other activity if you're doing more than   one so will appear in this box for my part I  only have one in the following table fill in   the customers or company's data name address and  tax number now the country location of your client   is very important if your client is Portuguese  or outside Portugal you must choose and indicate   here because the location of your client will  also be the basis of how your tax is computed   it is possible to leave this box completely blank  and not indicate who is the person receiving the   service and when you finish issuing the invoice it  will be issued anyway but the system will send you   an automatic notice that the invoice cannot be  cancelled afterward because you do not indicate   the costomer details so this is up to you guys  and I'm only informing you the consequence if   you don't put the customer's details you can  also put the passport number on the nth or other   identification document if you don't know their  tax number if you want to keep update on my next   video all regarding Portugal or request or suggest  a video regarding your concerns please subscribe   and like continuing here in the next box we will  Mark which payment from your client you received   as it may be for the reason of payment for good  or Services which is actually the remuneration   you have already received for that service and in  my case it will be the payment of their fees then   you also have Advance if you were given a receipt  for advance fee which is a part of the amount of   the fee that the client pays you before providing  the service as if it were a down payment of the   fee for the service ask or it could be an advance  for payment of expenses on behalf of the client   like payment for the expenses on account of the  customer which as the name implies is an amount   the customer send you to pay for the expenses with  that service and it's not remuneration for you the   professional who is performing the service it is  for payment of expenses only precisely because   of this the system gives a warning here that  When selecting the amount received as advanced   payment option for the payment of expenses on  behalf of the customer the selected vat and   IRS rates will be lost this is because if you  are receiving an amount from your client which   not for your own remuneration or which is not for  the total compensation or payment for completing   their work or delivering the required services  but to pay some expense with those Services you   will not have to pay taxes which are vac and the  IRS on Mount the expense fee will not be for you   so for my part the amount I received here from my  client was for a day worth of work for fixing the   scene and the client want it at the end of the  day and pays me €600 in fees here I'm going to   type the description that the payment is for fee  on fixing of a scene on a specific project you can   a the project if you want it all depends on you  now here in the base value let put €600 which was   the amount the client paid me here in some cases  if you charge vat to your client you don't put the   exact value because that will still apply to the  base amount and if you put 600 as base amount here   like I did and then add the vat amount it will  appear that you received more than €600 I'll break   it down so you get better understanding on this  we'll now focus on the vat regime box for this as   I indicate €600 as a base value and then indicate  that I will withhold vat at the rate of 23% which   is the standard rate here in Portugal for my  service see that Below in the rate received the   value will appear € 738 which is wrong I didn't  receive € 738 from my client I received a total   of €600 so in this case the value that I fill here  in the base value should be € 462 then the amount   received will will be €600 as you can see here  it's now exactly the amount I received from my   client so what I actually received in my pocket  was € 462 and I will pay the Portuguese State a   tax which is V in the amount of € 138 for now as  you can see on my vet value there no deduction   it's zero even though I choose option content of  23% that because for first year of registration   you will never charge V to a client even you do  more than 122,000 500 also very important in the   description to always translate it in Portuguese  as specific as possible what you've done because   if you're applying for the nhhr the non-habitual  residents this description is part of the proof   whether you can get nhhr perks or not so make  sure to apply for nhr before March 31 although   the NH ofr came to an end in January 2024 the  Portuguese government state of budget proposal for   2024 included modification that deter the end on  non-habitual Resident regime it's still possible   for individual to apply up until March 31 2025  but the eligibility requirement for this deadline   might be stricter and more specific only for  certain profession another to consider when your   clients are outside Europe you do not charge vat  in any circumstances the location of transactions   subject to vat is one of the most complex matters  in the field of value added tax locating a   transaction for tax purposes means determining the  the territory where that transaction is taxable   that is why it is extremely important that we  have at least good understanding of the rules of   location so that you're able to get Exempted from  or if you need to charge back to your client or   if your country have double taxation treaty with  Portugal in order to avoid double taxation at the   time of your application therefore when filling in  the receipt you must also indicate the reason for   not having to pay the tax this applies whether  the company is from an EU country or not so   it important to choose the right vat regime option  here that you're not obliged to charge vat in   ance with article six that is related with  location of your client if it is a client inside   EU but outside Portugal you do the vat reverse  charge and if it is an interc Community Services   you need to charge vat ing with the vat  law in the client's country inside EU and then   you need to use the right article when filling  in your invoice here ing to your situation   to be honest it's more daunting for me to issue  REO than declare an e especially if you're just   started here in Portugal because there's a lot to  consider as Foreigner of which article you need   to choose for your case remember to consult with  an accounting or tax professional for specific   guidance based on your personal situation if  you're still not sure they can provide detailed   advice on which option is most advantageous for  you you need to choose here the appropriate vat   regime and in my case Rass delocalize of how  article six which related to the location of   my client which is outside Europe and then in the  base value you will be able to put €600 because   as you will not be paying that for a year so it's  zero the amount received at the end will be equal   to the base value one more thing don't forget that  you input the payment you received on rebos Verdes   and Euros currencies it's important to convert any  foreign currencies to Euro now when I go issue my   receipt how do I know if I'm using the article the  exemption regime or the normal vet regime I know   it can be very confusing and Technical to find  out about this you have to see how your opening   statement of activity in finances so make sure  to input the r information when opening activity   online or as I advised open an activity in person  at the tax office to avoid any mistakes in filling   the form remember to give an estimation on how  much you're earning in one year to the staff so   that they'll know you are exempt in certain area  or not if your activity was open with exemption   regime when you issue your receipt you will has  opt for the exemption regime in each of them   on contrary you opened activity with normal vat  regime you will always have to pay vat in each   of your operations at a rate of 6% 133% or 23%  depending on the type of service you provided   the vast majority of professional freelancer who  came here on digital Nomad Visa is tax under the   rate of 23% but remember for the first year you  do not charge V even if you earn more than the €   122,500 on that year it starts only after one year  of registration another thing it is possible to be   exempt at least for workers covered by articles  53 of the vat code and article 9 of the vat code   if you have category B which if you live and work  in Portugal as freelancer and if your total annual   income is less than €10,000 you are exempt from  vat under article 53 of the vat code you may be   Exempted for other business reasons and you should  check your activity in article 9 of the vat code   if you are not exempt you must the percentage of  that due the normal rate in Portugal is 23% or   if your yearly income gets over 12,500 you will  be informed that you need to start charge vat   23% for services to your clients after completing  one year of activity for my part since I gave my   annual estimation to exceed € 122,500 I'm not  eligible for the Eva regime of article 53 now   that you know how the vat is calculated to the  payment you received from service you provided   let's focus on reverse charge mechanism most  freelancer or self-employee can choose this   if they met the criteria choosing the right vat  regime is very important as it will determine how   much of vat you will pay regarding your services  or sold Goods please ask for advice if you are not   sure what that option you should use it also very  important to choose the right article if you want   to reduce or even exempt some type of services  from tax for digital Nomad or some Portuguese   local Freelancers whose client is outside Portugal  you do not charge that this doesn't necessary   inclusive to only countries located outside Europe  but also EU members that reverse charge is the   process that occurs when an individual purchases  products or services and is responsible for their   settlement that is when there is an investment  of the taxable person for vat purposes determine   whether your client is inside or outside the EU  and consult a tax professional or the Portuguese   tax authorities for personalized advice if you're  not sure how your activity or trade applies   on reverse charge mechanism or there are more  technicalities to consider for reverse charge to   apply the following conditions must be jointly met  one the supplier is not established in Portugal   and does not have a fiscal representative there  two the client is a taxable person established in   Portugal or is that registered there with a fiscal  representative if any of the above conditions   are not V reverse charge will not apply and the  supplier will charge the appropriate Portuguese   vat rate on their transactions remember reverse  charge is a deviation from the general vat rules   in which businesses usually charge VAT on supplies  and deduct VAT on purchases through the reverse   charge mechanism the supplier does not charge  VAT on the invoice to the client and the client   is responsible for manually calculating the vat  on their vat return this is to be simultaneously   reported as input and and output vat making the  transaction have a no effect on the cash flow of   the client as you can see in the vat regime box  there's a lot of options regarding that reverse   charge so you must choose the right regime under  reverse charge that applies to your services for   this two Eva that pertains to Article 2 this is  occurs when particular reverse charge is related   to the location of the trades it applies when the  buyer is a taxable person for vat in Portugal and   carries out transactions that involve the  provision have the right to deduct the tax   what it means the invoice issued by the provider  of the services or Goods must contain the words   that reverse charge the individual who transfers  the services or products does not pay vet and it   is up to the person who receives the services or  products to reverse charge the tax this option   applies in specific cases such as Construction  Services and has to do more on domestic   reverse charge the choice between these options  depends on the type of service you're providing   if you involved in construction related activities  or domestic reverse charge then the second option   may be more suitable otherwise the first option  usually applies which is the reverse charge   general rule article 6 some self-employed also  employs the article 6 regress to localize of   how article six this is specifically pertained  to location of operations on their vat regime   instead of reverse charge general rule article 6  when dealing with clients outside Portugal it's   a bit confusing when dealing with location tax  law if you incurred some charges on payment from   commission or there's a deduction made by your  client then the Eva reverse charge general rule   article 6 apply for you since you need to reverse  that deduction from your payment since you don't   want to be charged again let's say you earn €300  from your client but you only receive €250 the   base value you should put on your re AO Verity is  the full amount the €300 an amount deducted to you   which €50 should be reverse charged so that the  Portuguese finance will not charge you again you   don't want to put 250 in base value and be charged  again for that and what left to you earning will   get smaller very important also when applying  either AOL quidas or the reverse charge you   also need to fill in the forms for the reverse  charge like the model of 30 and RFI you'll need   your client information like the tax number if  there no deduction incurred in your payment and   no need for the reverse charge exemption then it  best to choose the article 6 Vass to local ISL   which relate to the location to your client also  from what I know the article 6 location doesn't   include reverse charge so pay attention when  you're doing your resu over days if you need   to apply a reverse charge you use the ofal quidas  so remember you must indicate on the receipt the   location of the transaction in ance with  the specific location rules set out in article   six of the vat code if you make a sale within the  European Union EU that transaction is not subject   to vet collection by the person providing the  service unlike domestic customers there is no vet   charged on incommunity transactions in addition to  the sale of products there is also no vet charged   by the supplier in the supply of intrac commmunity  services only taxation in the country of   destination therefore when filling in the receipt  you must indicate the reason for not having to   pay the tax choose the option vet reverse charge  General rule article 6 number six this applies   whether the company is from an EU country or  not precautions to be taken in the activity   when issuing green receipt for foreign companies  specifically to inra commmunity transactions and   in commmunity Services as I mentioned a while  ago make sure which one you're doing belong to   and make sure in your open activity statement it's  Mark Sim so when filling out the Declaration of   commencement of activity you must also choose  the option provision or acquisition of intrac   commmunity services that that because if you  already have an open activity and you have foreign   customers and you need to issue receipts and on  your opening statement of activity in finances   the provision or acquisition of intrac commmunity  services is Mark Sim which mean yes here a sample   of how it looks if it marked now or no then you  must make a change to your activity to do this you   just need to fill in that field in your activity  data on the finance portal to do this you must   follow the following path click on personal data  then on activity data and only then log in with   your credentials and add the option provision  or acquisition of intra commmunity services or   you need to declare or inform the finances office  in person that you are doing services for foreign   countries so that your ni shows up on V website as  a valid number for international companies here's   a sample how it look as you can see if I input  my nif number or vat number on the VES webs it   it will appear inv validate on the V database also  very important for companies to missal in the EU   the taxable person number of the company has to be  confirmed on the V platform if it is not possible   to make this confirmation you must charge that at  the rate in force in the customer's country every   time you issue an invoice Rebo ver for a European  customer that is exempt of V you need to check V's   database for your customer tax ID and keep that as  a proof or you will have to charge Diva although   you don't charge vat in your first year but if  you're obliged to you charge V to clients inside   Portugal remember even your freelancing outside  EU under the simplified regime and earning over   € 122,500 you do not have to pay vat if you are  working with a foreign client and you just have   to follow the reverse charge rule it applies to  you ing to article 194 when invoicing for   Eva in Portugal ensure that your client meets  the criteria mentioned above and keep track of   any changes in regulations I hope I'm able to  help on explaining the vat regime options now   let's move on to basda incented M IRS or IRS  calculation basis if your annual total income   does not reach 10,000 cumulatively you are exempt  from taxation dispensa de Renzo article 101 of the   Cs article 101b of the cirs is the section that  governs this waiver of detention prior to January   2016's modification to the green receipts it was  possible to select without retention article mine   number one you must select the base at 100% in  other circumstances there are few exceptions   such as the various categories whose base is  50% and the impaired disability of more than   60% whose base is 25% if you're not exempt there  is IRS retention whenever the entity to which   you issue the bill makes its accounts declares its  expenses to finances you must select the retention   rate generally the amount to be withheld is 25%  for the IRS Class B taxpayer in the simplified   plan article 101 of the personal income tax code  say RS addresses issues related to withholding   tax on income let's explore the differences  between non-resident with have establishment   and no withholding article 101 number one of the  Cs for non-resident without establishment first it   refers to individuals or entities that do not have  permanent residents in Portuguese territory second   these non-residents may earn income in Portugal  but they do not have a fixed establishment in the   country third tax witholding taxes applied to such  income ing to the rates defined in article   101 fourth the withholding rate varies depending  on the category of income example property income   services rendered etc for no retention article  101 of one of the cirs first this term refers to   a specific situation where withholding taxes are  not applied second ing to article and one   of one of the C RS entities that have organized  accounting are required to withhold tax in certain   situations third retention rates vary depending on  the type of income 11.5% for services rendered if   the paying entity has organized accounting 16.5%  for category B income 20% for category B income of   value added of a scientific artistic or technical  nature obtained by non-habitual residents in   Portuguese territory 25% for category F income  property income and for specific activities listed   in article 151 of the personal income tax code  such as Architects Engineers artists Etc fourth   self-employed workers whose income does not exceed  €10,000 per year are exempt from withholding tax   ing to article 9 of decree law law  number 42 g91 in summary while non-resident   with establishment refers to the condition of  non-residents who obtain income in Portugal   while no withholding article 101 number one of the  C RS specifies the withholding rates applicable to   different categories of income attention that  there is only retention when your client has   organized accounting if the customer does not  have an establishment in Portugal and is not   a resident you must apply the option no withhold  buing non-resident would have establishment when   issuing a green receipt this option is suitable  for transactions with non-portuguese entities on   the other hand if a client is a Portuguese entity  and you are under the regime of article 53 you   will also be exempt from IRS withholding in this  case choose the option no retention article 101   number one of the cirs remember to fill in all the  required data such as the service provision date   and the type of document you were issuing invoice  invoice received or receipt if the client does not   have an establishment in Portugal the option no  withholding non-resident with have establishment   is appropriate to ensure that the IRS withholding  is not applied ing to article 101 of one   of the personal income tax code say RS the  tax non- withholding regime Works through   the exemption from withholding taxes on income  obtained by taxpayers who are not resident in   Portuguese territory this exemption applies only  in situations where there is a double taxation   agreement between Portugal and the taxpayer's  country of residents thus ensuring greater   facilitation of international trade and promotion  of economic activity most self-employed workers   are subject to IRS withholding tax at the rate of  25% but if your turnover is less than € 12,500 per   year you are exempt from withholding tax article  101 B1 a of the cirs so choose the exempt form   withholding here for my part it's non-resident  without establishment since my client is outside   Europe so there's a lot to consider and can be  very tricky and confusing whether you eligible   for exemption or retention or not remember I  am neither a professional nor expert in this   field if you have concerns on you tax situation  it's best to consult The Official Guidelines and   seek professional advice to ensure compliance with  portuges that regulations seeings everything looks   okay and fine fin we click issue and then this  box appears for you to confirm the issuance of   receipt with your detail and your transaction so  better check if everything is in order and click   issue again and now you got your proof of green  receipt you can save in your computer and print   and send to your client let me show you a to you  here this is what green receipt looks like you can   see the first part is the original and the second  part is the duplicate so there you go I would say   that working with green receipt has its Advantage  which is being able to work from any anywhere you   can and provide different services and have many  different clients have holidays anytime finally   You Will Be Your Own Boss and if you're thinking  about working with green receipt in Portugal you   know that you can apply for a resident permit to  carry out independent professional activity so   that is for now and I hope this information is  helpful to you when you issue your resc overes   as first timers and hope to see you next  on my video don't forget to subscribe and   like if you don't want to miss anything and if  want to hear more with this kind of video bye