The Difference Between Tax Professionals - Part 1

international taxes taxes Mar 31, 2022
Expat taxes in Portugal

ExpaCity Community and VIP members get access to twice-monthly live Member Forums. Each Forum is different, an open discussion of whatever members want to talk about, ask, confirm, share, or just commiserate, etc. We do a lot of laughing and a bit of beveraging -- time zone dependent.

Last month, there was a lively discussion about taxes and tax accountants. (Really, it was interesting!) I learned it's not always easy to figure out what kind of tax professionals can best help after moving to Portugal. 

So I spoke with our ExpaCity experts, and here's a rundown of the different kinds of professionals.

ExpaCity delivers detailed information and access to these kinds of professionals, on how to plan and navigate your living abroad taxes.

Portuguese Tax Accountant 

This professional is credentialled to prepare and file your Portuguese taxes for you in Portugal. Some are credentialled only for individual taxes, others only for business/corporate taxes. Want to know which? Just ask. 

It feels like there are a lot of accountants in Portugal because the government requires Portugal-registered businesses of a certain size must use an accountant/accounting service. Some accountants are basic bookkeepers. Most have little/no knowledge or experience with taxes outside of Portugal. Think of it as similar to your home-country accountant: would s/he be able to prepare, file and give advice on Portuguese taxes? The same goes for Portugal.

Home-country Tax Accountant / CPA (USA)

Your home country tax accountant is generally credentialled with local expertise to help you with taxes "at home". For example, in the USA, this person may be a CPA, or Certified Public Accountant, with special education and who has passed special exams and is certified to prepare/file your home-country taxes. It is very unlikely this person can prepare/file your Portugal (or any other country) taxes.

In the USA, CPAs are licensed by their applicable state boards of accountancy. They must complete 150 undergraduate hours and pass the four-part CPA state-administered CPA exam covering Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting, and Regulation. Taxation is covered under Regulation.

EA or Enrolled Agent (USA)

This is a USA professional. An Enrolled Agent is a tax practitioner who is licensed at the federal level by the U.S. Internal Revenue Service (IRS) -- the highest credential awarded by the IRS -- and can prepare and file individual or business taxes. This professional is a precision specialist in taxation.

EAs often come from working at the IRS in a position interpreting and applying the tax code on a regular basis. They must pass a three-part exam which covers all aspects of the US IRS tax code and pass a background check conducted by the IRS, along with proof of ethical tax history. 

Finding the right professional, or in the case of US citizen foreign residents, often two professionals, can be one of the most challenging aspects of moving to Portugal. Knowing who does what, and the expertise they can offer, helps you get started. 

But we're not done. See Part 2 for a few more tax professionals you might consider as support pre- or post-move.   

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