[mtmail]

Quite a difference. When you work in Portugal you need to pay the local income taxes, but your company needs to pay the relevant local taxes as well (for example half of your health insurance, depends on country). In order to do that they need to be registered in Portugal (without a tax id you can't pay taxes) which means opening a subsidiary. As you can see it asks a lot from the company and they might not be willing to do that for one employee.

With European tax law, when you live and work in Portugal, still for any day you work for your Irish employer in their Irish office you have to pay income tax in Ireland (double taxation agreements between the countries). If it's less than 5% of the work days per year it doesn't matter. If you have to go to Ireland for whole weeks for meetings or training you might have to pay taxes in both countries. Well file taxes in both countries for the percentage of working days. Again the double taxation agreements between the countries guarantee that you don't pay taxes twice (or if so you can claim the extra amount back).

As contractor it's easier. You live and work in Portugal and pay local taxes. Of course you need to register as sole trader or single-person company (whatever the equivalent in Portugal is). Any trip to Ireland is simply a business trip. It's both a cost and (ideally) you invoice that to your client (the Irish company). Your salary needs to rise because now as a sole trader you have additional cost (other insurances, slightly different taxes, you have to pay for a computer yourself, you no longer have sick days and no longer get paid for days not working e.g. holiday).

A third option is to find a Portuguese company (e.g. small agency) where you become employee and they send invoices for the Irish company.

The company will likely try to get you to work as a contractor because it's an easier setup. For you it's better to stay an employee, ideally get reimbursed for any trips to Ireland, but you have to deal with filing taxes in both countries.

[roryrjb]

All very true. I'm in a similar position, living and working in Portugal for a UK company. Basically because it asks a lot of the company I am a contractor, registered in Portugal, paying taxes, social security, etc. But because of the greater burden on me and not on the company I negotiated a higher rate.

[donbeo]

My main reason to consider portugal was a favourable taxation with (NHR system) would I be able to benefit from it under any circumstances ?