Your Tax Number: Almost nothing important can be done in Portugal until you have registered for your N.I.F. – the Número de Identificação Fiscal, also known as the Número de Contribuinte – which is your unique tax identification. You can’t open a bank account, buy or rent property or start a business without it. Presenting it to your landlord, doctor, dentist and pharmacy allows them to record on their computers that you have spent money on items that will become tax deductible one day. Give it to the waiter when you order a snack or a meal and, again, you will start to save on future taxes. I can help you to register for this essential number, show how to access the Finanças portal online in order to monitor your personal/company transactions, issue business invoices and much more.
Banking: If you intend to buy assets such as property or to live and work in Portugal, you will need a bank account. Banks in Portugal offer the full range of modern financial services, and the “Multibanco” ATMs in every town and city are similar to, but more advanced than, the LINK system in Britain, for example. They allow you not only to check balances, withdraw or deposit money, but also to do everything from paying your personal income tax to buying a fishing license.
Taxes: Are you planning to work or run a business in Portugal? Are you retired and living off pensions or other savings? Do you have children in full-time education? These are some of the important considerations when it comes to the way you will be taxed, and what your personal allowances will be. You may also be required by law to have a fiscal representative – which I explain later on this page.
As mentioned above, the Portuguese Government provides a modern, efficient online system to monitor collection of taxes such as I.M.I. (Rates/ Municipality Taxes), Capital Gains Tax and I.M.T. (Stamp Duties). Some areas on the portal are in English, but not all. You can find it here.
Non-habitual residency tax status – a big money saver.
For ex-pats planning to live permanently in Portugal, this is one of the most important tax-related matters – and it can save you a lot of money. Yet very few ex-pats seem to know about it, and even fewer lawyers and accountants understand it correctly. Ref: Portuguese Investment Tax Code, created by Decreto-Lei n.º 249/2009, de 23 de setembro.
This law was designed to attract “high added value” people into Portugal. By the way, “high added value” does not mean millionaires. It means that we want skilled, well-educated people to come and settle here. There is quite a liberal list of “high-value” categories, including all the professions – doctors, lawyers, teachers, etc, IT workers, engineers, artists, journalists, designers, and many more.
Non-habitual tax status exempts the individual from personal tax on his foreign-earned income, savings and pensions for a period of 10 years (provided you meet the criteria throughout that time), dating from the year when he registers as a resident in Portugal. He is still required to file tax returns and to declare all income earned within Portugal. For all earnings within Portugal, he is granted a flat rate of 20% for the 10-year period. After that, tax is assessed at whatever rate normally applies to his income and circumstances.
Non-habitual tax status requires that the applicant has not been a permanent resident in Portugal for at least five years before he applies.
I have helped clients to achieve this desirable tax status, and I know some people who have saved enough during their 10-year non-habitual tax status to buy a house!
If you qualify, you have a good chance of having this advantageous status granted. Sit down with me and we will work together to create the rather long, complex application in Portuguese; you must assemble all the required documents and then be patient. All applications are processed in Lisbon, and it can take three to six months for an answer. But believe me, a “Yes” from the tax authorities is worth waiting for!
Fiscal Representation: If you earn revenue from renting, buying, selling or owning property, or from any business venture here in Portugal, and you are either 1) non-resident or 2) the business principal or Director of a Company, the law requires you to have a Fiscal Representative. This representative can be your lawyer or a financial professional, and they must be registered with the local Finanças or Fiscal Office. The representative’s job is to ensure that those in categories 1 and 2 above comply with all taxation matters, including the filing of annual income declarations, paying property taxes, and capital gains taxes. Remember: before you can start/run any business in Portugal or set up any kind of income-earning activity from your home – even if you are just renting a part of it – you MUST register this activity, and you MUST have a N.I.F. tax number.
Fiscal Representation services can make your life easier.
1. All relevant correspondence will be directed to the address of the appointed representative. You may live abroad, but the important mail and documents will be safe with your Fiscal Representative, who reports to you on a regular basis.
2. All communications from the Tax and Customs authorities go to the Fiscal Representative. This will include emails and faxes.
3. You are freed up from having to attend to the various documents in Portuguese, obtaining translations, completing forms, and filing.
4. You have peace of mind, knowing that official documents and declarations will be submitted before the correct legal deadlines, so that you will not be fined, even if you are abroad and unable to respond. All these responsibilities reside with your Fiscal Representative.
NOTE: I also provide a Registered Office Service. For a small quarterly fee, you can register your business at my office address, and all your correspondence can be directed to this address, and then forwarded to you anywhere in the world.