The Taxation of Compensation for Remote Work Expenses in Portugal: Unnecessary Complexity Relative to Other EU Member States

During the COVID-19 pandemic, remote workers had to bear the additional cost of new inputs needed to fulfil their professional tasks. In many EU Member States, compensation for these additional costs was dealt with by way of simple solutions in the law and by tax authorities. Portugal was no exception. Thus, rules had to be adopted to deal with remote worker compensation. A high degree of complexity, however, can be found in the Portuguese tax authorities’ interpretation of the new rules. Not all Portuguese employers and employees grasped the new rules in 2022, and it is expected that, from May 2023, a simpler regime will correct the pitfalls highlighted in this note.