Are you registered as a tax resident of Portugal - in error!?
Do you have a Portuguese fiscal number? If you do, it is imperative that you check how you are registered at the Portuguese tax department.
Prior to 2002, when fiscal representation was introduced, every person who obtained a fiscal number was automatically registered as being tax resident in Portugal. If you have never appointed a fiscal representative or have never altered your registration status you may well still be wrongly registered as a tax resident and this can have drastic consequences - as some individuals recently found when they received large tax bills for presumed income in Portugal!
If you are registered as a resident at the tax department (whether rightly or wrongly) you are liable to submit an annual individual (IRS) tax return in Portugal declaring here your worldwide income. Being registered as a resident in itself does not (currently) trigger a tax investigation and there are many such residents who do not submit declarations because they do not have any income.
However, if you become involved in some transactions which require declaring your fiscal number, this can lead to the tax authority presuming that you have generated income in Portugal sufficient to justify that transaction. For example if you are registered as a resident and buy a property at a value of over 250,000 euros or a car for more than 50,000 euros, you can be deemed to have received an income equal to 20% of the property purchase value and because you did not submit a tax return you could suddenly receive a tax bill for 60% of that “presumed income” which on a property purchased for 251,000 euros is a tax demand for 30,120 euros!!
With the ever increasing exchange of information between official bodies in Portugal, it is now vitally important that people check their tax status as, after an event, it can be difficult to convince the tax office that you were non resident IF you are registered as resident.
Sovereign - Consultoria Lda are able to undertake a Personal Tax Check on your behalf to ensure you are fully compliant in Portugal and properly registered.
Contact us for more information:
Sovereign - Consultoria Lda
Parque Empresarial Algarve
8400 Lagoa
Portugal
Tel: +351 282 340 480 Fax: +351 282 342 259
