Not sure how to file a tax return in Portugal? Whether you need to file or not; the first step to understanding the Portuguese tax system is becoming familiar with the concept of self-assessment. Our accountants at RHJ Accountants like to keep things simple, so here are five tips for filing Portuguese tax returns, including what happens after the submission and why we need certain information.
Tip 1: Submitting Payslips
To start a tax return, gather all payslips together ready for submission. Paperwork is very important, so we recommend submitting all payslips separately, by separating them into months. This is just like how you would receive a payslip if you were employed.
Tip 2: Different Investments
If you’re submitting a Portuguese tax return, you’ll need to include information about any investments you made during the year. This includes stocks, bonds, and mutual funds. By considering all your different investment locations and how much you receive per location; you will be able to narrow down where your income comes from. Rather than having all the information on one document, this simplifies the process. To ensure accuracy, you should submit your books along with your investments so that all income information can be cross-checked – that way we can avoid mistakes occurring!
Although it can be difficult to do in between work, tracking investment activity throughout the year is beneficial so it can be accurately recorded on your tax return; plus it will save you a great deal of time when preparing your tax return!
Tip 3: Bank Accounts
We’re often asked why does the tax authority need my bank account information? The answer is quite simple – it is to confirm the legitimacy of your bank accounts.
In this section, we ask you to review all bank account information and accounts that you currently have. We realise you may have bank accounts in different locations; not everyone has bank accounts with the same branch! Because of this, the information you supply depends on where your bank is located; we suggest speaking with us regarding what details the tax authority requires so that we can assist you.
Tip 4: Capital Disposals
Before we spoke about investments, a capital disposal is sort of an investment but it is still different. A disposal is when you sell, give away, or get rid of an asset. When you purchase an asset, that is an investment. Due to this slight difference, we need to have separate information.
For capital disposals we ask you to gather all investments you have with stocks and shares. The most important part of this is stating what month & year the investments were purchased, followed by the month & year of when the investments were sold. In similar fashion to Tip #2, we ask you to submit your statements alongside the capital disposal information so we can accurately check you records – plus we can then correctly amount and detail the total gain.
Tip 5: Anything Else Required?
Starting from Tip #1 to #4, we have detailed more complex matters that need to be included in a Portuguese tax return. It’s now time to detail some other aspects which also need to be included in the tax return:
- Pensions: Whether you receive public or private pensions; and how much you receive.
- Property: if you’re earning rental income, we need to know what the annual income is, as well as the expenses paid or payable.
- Other info: when it comes to revenue from donated companies, or revenue from something else you have received, we need to know how much it amounts to.
What Happens Once I Submit the Information?
To reduce your stress, we will email you and let you know that we have submitted your Portuguese tax return, including how much tax you owe and how much to pay. Following this, in a few days’ time (sometimes it can be up to a month), the tax return should be confirmed and, once this happens, we will be able to determine exactly how much tax the authority has asked for.
How RHJ Accountants Can Help
We recognise more than ever that individuals and businesses from the UK and other countries may be globally mobile. We aim to make you aware of the tax-efficient opportunities, available tax relief and structure finances for life at home and abroad.
Our international team of specialists operate from offices in the UK and Portugal. We work together synergistically to provide tax efficient solutions to our clients to help them grow their business whilst keeping tax liabilities to a minimum.