The biggest change for UK expats since Brexit is regarding Fiscal representation in Portugal.
The United Kingdom left the European Union on 31 January 2020. The withdrawal agreement put in place to manage the transition period between 1 February and 31 December 2020 has now come to an end.
From the 1 January 2021 all UK residents that hold a tax identification number in Portugal (número de contribuinte), as well as those who, although resident of the UK, are absent for more than six months, must appoint a fiscal representative in Portugal to act on their behalf. Due to the covid restrictions this date has been extended to 20 June 2021.
Until a fiscal representative is appointed all correspondence issued during the period prior to the appointment of the representative in Portugal, will be sent by the Tax Administration authorities to the registered address
What is fiscal representation?
All non-EU residents including UK expats who own property, hold a bank account or have any other commercial activity or interest in Portugal must by law appoint a Fiscal Representative that is registered with the Tax Department.
The Fiscal representative in Portugal must be registered on their behalf to receive any tax department correspondence and ensure compliance within the legal deadlines.
They are responsible for informing you of your tax obligations, applicable laws and deadlines. Notifications from the Tax Department generally require a prompt response within 10 to 15 days. If these obligations are not fulfilled, it may result in fines, among other penalties.
All non-EU residents must have a Fiscal Representative in place BEFORE requesting a Portuguese fiscal number.
Non-resident companies acquiring a property or setting up a branch in Portugal are required to obtain a fiscal number from the National Registry of Companies (Registo Nacional de Pessoas Colectivas) in Lisbon and must also appoint a Fiscal Representative.
The Número de Identificação de Pessoa Coletiva (NIPC) is the corporation tax reference number, VAT registration number and company registration number in one.
Many lawyers and accountants are no longer willing to represent clients in this way. Here at RHJ we work with our partner, a specialist Fiscal Representative who has been able to build very close relationships with local tax departments. We work together with the Fiscal Representative to support our clients. This allows us to keep up to-date with the ever-changing fiscal demands placed on both resident and non-resident clients.
Which EU countries require EU VAT fiscal representation?
The following EU countries require VAT fiscal representation for non-EU established businesses.
|Eu Country||Fiscal representative required?||Comments|
|Austria||Yes||VAT agent required with no shared liability|
|Cyprus||Yes||Some exemptions for direct registrations|
|Germany||Vat agent required with no shared liability|
|Luxembourg||May require tax office cash deposit|
|Netherlands||Only for import VAT licenses|
|Spain||Yes||Not joint liable|
|Sweden||Yes||Vat agent required with no shared liability|
FAQ’s :everything you need to know about Fiscal Representation
I have had my property for years, why do I now need a Fiscal Representative?
Financial institutions in over 100 countries around the world now collect information on their clients and their accounts and pass that data onto the clients’ country of residence. It is now more important than ever to make sure you are correctly declaring your income and paying tax in the right country. It also means that Tax Departments in Portugal are better able to enforce the law that all non-EU residents who own property or hold a bank account in Portugal must appoint a Fiscal Representative, resident in Portugal.
I have had a fiscal number for years and I do not have a Fiscal Representative. Is this a problem?
If you are wrongly registered with Financias in Portugal as being resident in Portugal for tax purposes you may be liable to declare your worldwide income in Portugal. Any Tax Department correspondence could also be sent to the wrong address. If your IMI property tax bill is sent directly by the Tax Department to your Portuguese property, you are definitely registered as being fiscally resident in Portugal!
RHJ can check your status and, if necessary, correct your registration on your behalf.
Why do I have to pay a registration fee and in subsequent years an annual fee?
A registration fee is payable because your Fiscal Representative will need to attend the Tax Department and undertake substantial administrative work to obtain your fiscal number and register as your Fiscal Representative. You will not pay an annual fee in the year you register with your Fiscal Representative but each year thereafter you will be charged an annual fee for ongoing fiscal representation.
What is not included in the annual fee?
Your Fiscal Representatives annual fee will not include the payment of taxes, submission of tax returns or time spent on research or dealing with other tax enquiries. This will be carried out by the tax and accounting team at RHJ if you have requested we act on your behalf as your Accountants.
What else can RHJ help me with in terms of fiscal matters?
Our tax and accounting team at RHJ will handle all fiscal matters including Tax Department audits on the purchase or sale of properties, submission of tax returns, declaring rental income from your Portuguese property. We have legal partners who can assist with conveyancing and any property transfer tax (IMT) and connecting legal matters.
Our team at RHJ can assist with the provision of documentation for property sales, Tax Department property registration documents, payment of municipal taxes, advice on rateable property values, debts certificates, as well as any corporate and individual accountancy services.
If you are experiencing any problems or difficulties in appointing fiscal representation, contact us today and we will put you in touch with a Fiscal Representative who will guide you through the process.