NEWS UPDATE - The Importance of Appointing a Tax Representative in Portugal

28 July, 2022

News article by Raquel Babo, Lawyer - International Atlantic Services

Last July 1st it was announced by the Portuguese Tax Authorities that the non-resident citizens, not part of the European Union (“EU”) nor European Economic Area (“EEA”), would be able to register in the new system of electronic notifications and citations and, by doing so, becoming exempt from the obligation to appoint a tax representative, but only if there was no tax legal relationship with Portugal, such as owning a property, nor performing any activity subject to VAT.

However, this July 20th, the Portuguese Tax Authorities has issued further clarification on the first announcement, stating that even non-resident citizens who do have a tax legal relationship with Portugal would be exempt from the obligation of appointing a tax representative if they would register themselves in the system of electronic notifications and citations, with the only exception being the citizens who have an economic activity in Portugal.

That said, it is important to analyze, in practical terms, if this exemption would be in the best interest of non-residents, especially citizens that do have a tax relationship with Portugal and are liable to tax obligations.

The non-resident citizens should be able to register in the system of electronic notifications and citations through the Tax Authorities portal. This web portal, though, is solely in Portuguese, meaning all interactions with the Tax Authorities would have to be in Portuguese. On top of that, all the correspondence would be sent to the registered address of the non-resident citizen, instead of being sent to the address of the tax representative and duly analyzed. Finally, with no tax representative, the non-resident citizen needs to be aware of his tax obligations and deadlines to fulfill them, as properly detailed below.

For citizens that have a property in Portugal and that apply for a Golden Visa card, the following essential acts, that are currently conduct by the Tax Representative, would have to be conducted by the citizen himself:

  • Request access passwords to the Tax Authorities portal;
  • Receive notifications from the Tax Authorities, namely, notices payment of property tax notifications and, which, in the event of non-compliance, may lead to tax execution proceedings and seizures;
  • Request and receive by cheque tax refunds, namely and, if applicable, the refund of Municipal Property Transfer Tax (“IMT”);
  • Request for non-debt certificates required for submission of the Golden Visa process;
  • Request for land registers necessary for the submission of the Golden Visa process;
  • Be alert to all other tax obligations, such as the annual Personal Income Tax (“IRS”) submission.

Due to the abovementioned, the waiver of the obligation of having a tax representative has to be treated carefully as the non-resident citizens have to be fully conscious of what that decision would entail in terms of complying with their tax obligations.

If you have any doubts, feel free to contact your case responsible. We will continue to inform our investors of all new developments in this matter.


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