1. Fiscal Representation of Non resident (individuals and companies)
Non-EU tax residents with any asset in Portugal must appoint a Fiscal Representative resident in Portugal.
We will liaise directly with the Tax Authorities to obtain a NIF (Tax ID Number) for yourself or a company and perform the registry as fiscal representatives.
After obtaining the NIF as a non-resident, you or the company must appoint a Fiscal Representative in Portugal, within 15 days subsequently to one of the following events:
– become the owner of a vehicle and/or property located/registered in Portugal;
– sign an employment contract or
– carry out a business activity on your own in Portugal.
After Brexit, UK tax residents with any asset in Portugal must nominate a fiscal representative until the 31stof December 2022, otherwise penalties will apply.
For EU/EEA tax residents, it is not mandatory to appoint a tax representative, however, in order to ensure compliance with tax requests and legal deadlines in force, it is highly recommended.
Note: We can also provide other tax services without being your Fiscal Representative.
2. File tax return (personal income tax and corporate income tax)
a) Rental Income
Filing of tax return is a declaratory obligation, which applies if there is any income arising from a property located in Portugal or if the customer receives any income from Portuguese sources. It must be reported to the Portuguese Tax authorities within a specific period of time even if the funds are received abroad (first right of taxation). We will provide the necessary tax assistance to guarantee that the property owner will be fully tax compliant.
b) Capital Gains Tax
The disposal of real estate assets located in Portugal is subject to specific rules.
Capital gains or losses must be reported to the Tax authorities within an exact period of time and, depending on the property seller (individual or company), different procedures and limit dates will apply.
We will gather all the necessary documents and information to determine the Capital Gains. This is a declaratory obligation and as your fiscal representative we will guarantee that all the process will be carried out on time.
Even if you are not our client, we will be pleased to deal with the Capital Gains process and provide you assistance with the filing of the associated tax return.
We will be the intermediary between the tax payer and the Tax authorities and guarantee an effective response to the usual tax inspections arising from the sale of a property.
3. Taxes
a) IMI and AIMI
IMI applies to any property owner in Portugal. It is payable in arrears (May, August and November) and calculated over the VPT (property rateable value) according the tax payer situation on the 31st December. Each municipality defines (usually in the beginning of the year) the applicable rate according to what is established in the state budget.
Additional IMI (AIMI) was introduced in 2017 and is also calculated over the VPT. It applies to all the properties owned by companies, unless the properties are registered for services. An exemption of 600.000€ applies per individual.
A penal rate of 7,5% applies to calculate the IMI and AIMI if the property is held by a blacklisted jurisdiction company.
The complete knowledge of the law in force will guarantee an efficient payment of the compulsory taxes.
b) Road Tax – (“IUC – Imposto único de Circulação”)
It is due for payment in the month of the vehicle registration in Portugal.
The late payment of the road tax leads to heavy penalties. We will ensure that all the vehicles registered in your name will pay the taxes until the limit date.
4. Local Lodging Compliance
Individuals with a business activity in Portugal who rent the properties directly to the tourists have different tax obligations from the ones that rent the property though an agency (“Titular de exploração”).
File yearly tax return for individuals with touristic rentals (Local lodging license – AL) and quarterly VAT return if annual income is above 12.500 € are some of the services we provide.
Besides the tax obligations above we will be able to assist you with the obtention of the AL license.
5. Tax returns for residents or Non-Habitual Tax Residents
Anyone who stays 183 days (over a year) in Portuguese territory, is considered to be a tax resident in Portugal.
According to the current law you may benefit from Non-Habitual Resident tax regime over 10 years. It applies to individuals who become tax residents in Portugal but have not been registered as residents in the past 5 years.
We will be pleased to register you as a NHR. Depending on the type and source of income, we will determine if it will be an interesting scheme taking into consideration your specific case.
6. Beneficial owner registry
The Beneficial owner registry is a legal obligation that must be completed by all the entities incorporated in Portugal. All persons who, even indirectly or through third parties, have ownership or effective control of legal entities must be identified in the Central Registry of Beneficial Owner (CRBO).
As chartered accountants we will be able to assist you with this obligation.