Portugal Income and platforms
Paddle earnings: prepare your Portuguese activity
You distribute software or a digital product through Paddle. Prepare the file around the reseller role described by the platform and the contractual relationships applying to the product you actually sell.
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Understand the merchant-of-record role
Paddle describes itself as a reseller and merchant of record for transactions covered by its service. This differs from merely processing a card payment. Review the contract used, the entity involved and the documents corresponding to your settlements. The VAT or sales-tax responsibilities Paddle describes for the final sale relate to that role. They do not mean your own income or Portuguese obligations disappear, or that every transaction outside the service receives the same treatment.
Prepare the actual distribution economics
Gather sales details, adjustments and amounts settled, then describe any other channels used for your product. Direct sales and Paddle distribution should remain identifiable. Prepare refund terms and the services you continue to provide, such as support, maintenance or implementation. Ask which records support the relationship with the reseller and how to connect them to settlements. Do not substitute a general statement about platform taxation for the contract and transaction information needed to organise the business properly.
Reconcile the records with the payment received
Prepare a file covering a complete period: agreement, detailed sales or earnings, fees, refunds, settlement and bank statement. Match references as well as totals. A received balance can combine several transactions and adjustments from another period. Where currency changes, keep the original currency, converted amount and identifiable fees. Raise discrepancies with the accountant using the supporting records instead of hiding them in a generic revenue line. This makes it possible to explain how the final payment was assembled.
- Agreement and identity of the entity paying you.
- Income, fees and refunds shown separately.
- One complete example matched to its bank settlement.
Prepare a change to a Portuguese company
Describe the current account holder and the entity intended to operate after formation. Before changing anything, ask the platform which details, conditions and supporting documents apply. Prepare a transition date and preserve the former holder’s records. The structure decision needs to consider all your revenue streams, contracts and spending. A question about one statement does not automatically require a new company; it may simply reveal a need for better records. Identify that need before deciding what assistance to request for the business.
Portugal
Before you incorporate
Registering as self-employed and incorporating a company are different routes. The choice depends on how your business actually operates. A Portuguese company alone does not determine your tax residence or the treatment of every source of income.
Information to gather
- Your country of residence and where you actually work.
- A description of the services or products you sell.
- Whether your customers are businesses or individuals, and their countries.
- Any shareholders, existing business structure and your planned timing.
Sources and references
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