A fiscal representative is the middleman between you and the Portuguese tax and customs authority (Autoridade Tributária or Finanças). If you have any financial ties in Portugal and live outside the European Union, you need a fiscal representative in Portugal. For most non-residents, having a tax representative is mandatory.
This representative can be a person or a company, such as a law firm. They ensure you receive your tax correspondence from the tax authority, comply with any tax requirements, and assist with submitting income statements and personal income tax filings.
In this article, we'll cover:
- What is a fiscal representative?
- Who needs a tax representative in Portugal?
- How to appoint a fiscal representative in Portugal
- Cost of appointing a fiscal representative
- Penalties for not having a tax representative
What is a fiscal representative?
A Portugal fiscal representative is an individual or business serving as a contact point between a non-resident person or business and the Finanças.
According to the Finance Portal, "any person, natural or legal, residing in national territory may be appointed as a tax representative" as long as they have a Portuguese address and are registered with the tax department.
However, it is crucial that you appoint a qualified person or company as your representative, as they are also supposed to ensure that you comply with Portuguese tax laws.
Typically, responses to notifications from the tax department need to be made within 10 to 15 days. They may incur fines and other penalties if these responsibilities are not met.
Benefits of having a fiscal representative
- Simple admin: A fiscal representative handles tax procedures, paperwork, and interactions with Portuguese tax authorities.
- Ensuring tax compliance: They help you comply fully with Portuguese tax obligations and deadlines, preventing penalties, fines, or potential legal issues stemming from non-compliance or misunderstandings.
- Local tax knowledge: The fiscal representative is up to date on the most current legislation and will quickly inform you of any upcoming changes to taxes in Portugal that might impact your tax standing. This is particularly beneficial if you’re not fluent in Portuguese.
- Tax planning: A qualified fiscal representative is often a tax compliance consultant who can offer advice on tax-efficient strategies and how to utilize available tax benefits or exemptions.
Who needs a tax representative in Portugal?
There are several criteria for who needs a tax representative in Portugal. For example, it is a legal requirement for non-resident business owners to have one.
Similarly, if you aren't a resident (whether temporary or permanent) in Portugal, live outside the European Union, and own property, you must appoint a tax representative. The same regulations apply if you maintain a bank account or have any other commercial activity in Portugal.
In short, you must appoint a representative when:
- You are a non-resident and own property or registered a vehicle
- You are a non-resident who owns a business in Portugal
- You are a non-resident who earns an income in Portugal
- You're getting a NIF number in Portugal from abroad (outside the EU)
You don't need a representative if you have a tax identification number in Portugal (NIF) but relocated outside the EU and became a tax resident there—as long as you have no financial ties to Portugal. Otherwise, you are classified as a non-resident taxpayer.
How to Appoint a Fiscal Representative in Portugal
Appointing a fiscal representative in Portugal is straightforward, but requires some consideration. Many expats and non-residents prefer to appoint qualified companies or accountants to represent them, and your choice shouldn't be made lightly.
Whether it is a company or an individual, you must notify the tax authorities of this appointment.
In most cases, when going through an agency, they will guide you through the process of formally appointing them by signing a representation agreement. This grants them the legal authority to manage your tax obligations in Portugal.
A nominated tax representative can also request and accept the designation in person at a Finanças branch or citizen shop if they have power of attorney on your behalf. This means that you don't have to be present for the appointment.
However, you can appoint an individual as your representative on the Finance Portal. After you have logged into your account, click on: Citizens > Services > Registration Data > Representative > "Submit Nomination" and select "IRS".
Cost of Appointing a Fiscal Representative
The cost of a fiscal representative in Portugal can range from anything between €50 to over €1,000 per year, depending on the company and your tax situation. While it will be free to appoint a friend or acquaintance as your representative, we strongly advise against it.
GetNIFportugal charges €350 to connect you with a Portuguese lawyer who will act as your fiscal representative and request a NIF for you. We offer ongoing fiscal representation that includes forwarding messages from the Tax Office to you until you are assigned a new NIF tax representative (these services are charged at an annual fee of €350).
Penalties For Not Having a Tax Representative
Failing to appoint a representative when mandatory or designating a representative without their express consent can lead to a penalty ranging from €75 to €7,500.
Non-resident taxpayers have 15 days to appoint a tax representative after determining that one is required. However, if you plan to do professional activity in Portugal, you must appoint a tax representative immediately upon registering the activity with the Portuguese tax authority.
Frequently asked questions
Do I need a fiscal representative in Portugal?
If you are planning to have, or currently have, any financial ties or business in Portugal and are living outside of the European Union or European Economic Area, you will need a tax representative in Portugal. The tax or fiscal representative will be your point of contact between you and your business, and the Portuguese government’s finance service.
I have a fiscal number in Portugal but don’t have a representative. Is that a problem?
Having an NIF number and not having a fiscal representative could mean that you are wrongly registered at the Tax Department as a resident of Portugal for tax purposes. If that’s the case, you may be susceptible to declare your worldwide income in Portugal and pay taxes here.
In addition, 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, it means you’re registered as being fiscally resident in Portugal.
Why do I need a fiscal representative in Portugal?
You need a fiscal representative to help you follow Portuguese tax laws and communicate with the Portuguese tax office. Hiring a representative makes it easier to stay compliant and manage your taxes. They will inform you about tax rules and regulations. This includes submitting tax returns, paying taxes for you, and handling other tax-related tasks.
Can I appoint any individual or company as my tax representative?
Technically, anyone who resides in Portugal and has Portugal tax residency can act as your tax representative. However, it’s generally recommended to appoint a professional such as a lawyer, who is well-versed in the complexities of Portuguese tax law. This is to avoid potential fines or charges of tax evasion due to misunderstanding or misinterpreting tax laws and regulations.
How much does it cost to hire a tax representative?
The cost to hire a tax representative varies, but GetNIFportugal charges €350 to connect you with a Portuguese lawyer who will act as your fiscal representative and request a NIF for you. There’s also an annual fee of €350 for ongoing fiscal representation, which includes forwarding messages from the Tax Office to you until you assign a new tax representative.
Can I change my tax representative?
Representatives can be changed as long as the new representative is properly registered with the Serviço de Finanças and you alert Finanças about the change.
Is a tax representative the same as a tax advisor or accountant?
Tax representation services are similar to a tax advisor or accountant in that they can handle fiscal matters such as preparing and submitting tax returns, VAT number registration, invoicing, and payroll. However, a tax representative specifically acts on behalf of non-residents and serves as a point of contact between them and the Portuguese tax authority. Their role is to ensure their clients comply with Portuguese tax and VAT law and regulations, which may go beyond the typical duties of a tax advisor or accountant.
Is it possible to appoint a fiscal representative in Portugal online?
Yes, it is easy to appoint a fiscal representative online. You can do so through the Finanças website or visit a tax office or Citizen’s Bureau (Loja do Cidadão).
Do I need a fiscal representative in Portugal after Brexit?
Yes, non-EU and non-Portuguese citizens will require a fiscal representative when applying for a NIF number in Portugal. They will assist you with any dealings you have with the Portuguese tax authorities and will help with your tax department correspondence.
Do non-residents in Portugal pay taxes?
Yes, non-residents in Portugal are subject to tax on income obtained in Portugal, such as dividends, capital gains, and royalties.
