Understanding the Role of Tax Representatives in Portugal: Why Having One is Crucial
Isadora Ussene | Liaison Officer
Under certain circumstances, the Portuguese government requires individuals and businesses to appoint a tax representative. This representative will act on behalf of the taxpayer in dealings with the Tax Authority, ensuring compliance with Portuguese tax obligations and regulations.
More specifically, those who need a tax representative include independent workers, self-employed individuals, and foreign companies like branch offices. Failure to meet this obligation can result in legal repercussions as the appointment of a tax representative is required by law under these specific circumstances.
The tax representative must meet two key criteria:
- Have a tax residence in Portugal.
- Be subject to VAT if the non-resident citizen carries out a self-employed activity subject to VAT.
Due to some amendments to the tax law, tax representation is not mandatory for everyone, to gain a comprehensive understanding of this topic, let's delve into the legislation governing tax representation in Portugal.
The primary legislation regulating tax matters in Portugal is the General Tax Law, outlined in Law Decree No. 398/98 dated 17th December 1998.
Upon closer examination of the General Tax Law, we find that Article 19 numbers 6 and 15, respectively, stipulate the following:
- Taxable individual resident abroad and those who, although resident in Portugal, are absent for a period exceeding six months, as well as collective persons and other entities legally equivalent to them that ceased their activity, must appoint a representative for tax purposes, who is resident in national territory.
- The obligation to appoint a tax representative does not apply to taxable individuals who subscribe to the public service of electronic notifications linked to the unique digital Portal, the regime of electronic notifications and citations on the Tax Authorities’ website or the electronic mailbox. This is not applicable for taxable self-employed with activity subject to VAT, with the exeption of the provisions regarding legal persons or other legally equivalent entities that cease their activity.
Based on this, if you are a taxable person who chooses to register on the digital platforms of the Portuguese Tax Authority (e.g., Portal das Finanças) or an official electronic mailbox (e.g., Via CTT), the appointment of a tax representative is optional. (Under certain circumstances).
This stance is further supported by Law Decree no. 44/2022, dated July 8, which was accompanied by circular letter no. 90057 issued by the Tax Authority on July 20, 2022.
The requirement for a tax representative arises when a taxpayer enters into a legal relationship with the Tax Authority and does not opt for subscribing to any of the electronic notifications from the Tax Authority.
Do you Need a Tax Representative in Portugal?
Offering a straightforward answer to this inquiry poses a challenge, as it is a nuanced matter influenced by various factors specific to the situation. Considerations include whether the individual or entity in question is an individual or a corporate entity and other pertinent circumstances that could affect the particular case.
For taxable self-employed individuals with activity subject to VAT, non-resident corporate entities or other legally equivalent entities that cease their activity, having a tax representative is mandatory in Portugal.
For those for whom having a tax representative is optional as per legal requirements, opting for one in Portugal can be a prudent choice. It ensures seamless fulfilment of tax obligations in a foreign country, allowing individuals to fully embrace life in Portugal without the hassle of tax compliance. This affords them more time to immerse themselves in the beauty that Portugal has to offer.
Why is it Important to Have a Tax Representative in Portugal?
In instances where having a tax representative is not mandatory, it is still crucial to appoint one. This representative ensures timely receipt of all notifications from the Tax Authority and ensures compliance with the legal deadlines in force, complementing even in the fiscal scope. The tax representative also informs of the right to complain or appeal, whenever applicable or necessary.
Additionally, it is imperative to note that all notifications and summons will be in European Portuguese. Fluency in this language is essential for effective comprehension and response.
Furthermore, while the Tax Authority website offers various tasks, each may have a distinct process. Prior knowledge of both the specific situation and the digital channel itself is advised to navigate the website effectively.
To gain a better understanding of the digital channels of Portuguese Tax Authority be aware of the following:
- Deadlines are mandatory to comply with, failure results in penalties;
- Some tax obligations are not notified until they have a fine, such as vehicle circulation tax or specific tools like SCUT;
- Notifications regarding fines or delayed tax payments are exclusively available within the Tax Authority portal. You will receive an uninformative email informing you that you have a message on the portal. Then, you will need to access and navigate through the portal to understand what it is and access payment references. This process requires several extra steps to be completed.
- Notifications and citations sent through electronic channels are considered equivalent to those sent by post. However, depending on the Tax Authority's system, they may be dispatched as registered letters to the address you have registered with them. This means that if you have a non-Portuguese address, the risk of not receiving notifications or receiving them after the deadline has passed is higher. If you do not receive a notification, you will not be able to make the payment. In this case, you will need to request new payment references by navigating through the Tax Authority's website.
At Belion Partners, we specialise in tax representation, communication and notifications to and from the Tax Authority assessorship, bookkeeping and accounting services, tailored to meet the needs of individuals and corporate clients seeking tax compliance solutions in Portugal. Staying abreast of tax matters is crucial because it allows us to understand the complexities of engaging with the Portuguese Tax Authority, giving us a comprehensive perspective. This, in turn, enables us to provide customised solutions to meet each client's individual needs.
If you require assistance or information regarding tax representation in Portugal or any related matter,
reach out to us. We are here to provide expert guidance and support to your specific needs and circumstances.
Belion Partners LLP | Registered in England, No. OC382877 | VAT Reg. No. GB 157104723
Registered office: 5 St John's Lane, London EC1M 4BH, United Kingdom | tel +44 203 004 8972
Belion Portugal | www.belionportugal.com | A Belion Network Member
Lisbon: Av. Antonio Augusto de Aguiar 74, R/c Dto, 1050-018 Lisboa, Portugal | tel +351 211 450 644
