Ah, fiscal representation. Just when you thought you’d gotten your head around all the paperwork involved in moving to Portugal, this term pops up and throws you for a loop. Don’t worry, amigo – we’ve all been there, done that, and I’m here to break it down for you in plain English (or should I say, plain Portuguese?).
At Portugalist, we’ve been helping people move to Portugal since 2016. And during that time, we’ve helped lots of folks with fiscal representation. We can help you too.
Need a fiscal representative? Just fill out the form below.
Understanding Fiscal Representation in Portugal
If you have financial ties to Portugal (e.g. you own a property in Portugal) and you don’t live there, you may need to elect a fiscal representative. This is a person or company that acts as a point of contact between you and Finanças (the Portuguese tax authority).
- If you’re resident in Portugal, you do not need a fiscal representative.
- If you’re resident in an EU/EEA country, you do not need a fiscal representative.
- If you do not have fiscal ties to Portugal (e.g. owning a house or car in Portugal), you most likely do not need a fiscal representative.
However, if for example, you own a house in Portugal and you live in a non-EU/EEA country (e.g. the USA), then you need a fiscal representative.
Why do residents outside the EU/EEA need a fiscal representative?
For the purposes of fiscal representation, Finançasdivides the world into two groups: those that live in the EU/EEA and those that live outside.
- If you live in Portugal or an EU/EEA country, Finanças is willing to send any communications to your address, whether that’s in Portugal, France, Ireland, Sweden, etc.
- If you live outside this area, Finanças isn’t willing to forward communications. This is understandable as the rest of the world includes destinations all over the world (including Australia, Argentina, and Outer Mongolia, for example) and it may take a long time for communications to reach you.
Who Needs a Fiscal Representative in Portugal?
You might need a fiscal representative if:
- You own property in Portugal but live outside the EU/EEA (e.g. you live in the US or UK)
- You have a Portuguese car
- You earn income in Portugal (maybe from that cute Airbnb you’re renting out?)
- You have other tax obligations in Portugal
You may also need a fiscal representative if you’re applying for a Portuguese NIF number (Número de Identificação Fiscal) from outside the EU/EEA. Most people don’t need to pay for ongoing fiscal representation if they just get a NIF number (they can make themselves their own fiscal representative) but most law firms and companies automatically sign you up for fiscal representation when you order a NIF through them (although you can easily cancel this as soon as you have the NIF).
What are the costs involved?
Now, I know what you’re thinking – “Great, another expense!” However, appointing a tax representative doesn’t have to be expensive. It can even be free.
However, while any Portuguese resident can be your fiscal representative (hello, new Portuguese best friend?), many people opt for professional services. Why?
Well, what happens if your friend goes away on vacation for a few weeks? Can you rely on them to reliably forward communications from the tax office onto you?
Okay, let’s talk about costs.
- Prices vary but expect to pay between €150 and €500. This is an annual fee.
- It can be cheaper if you get a NIF through a low-cost online service and sign up for ongoing tax representation rather than trying to switch fiscal representation later on. Most online services will only get you the NIF but won’t allow you to switch fiscal representation to them.
- Of course, if you have a friend that can act as your tax representative, it won’t cost you anything (well, maybe a bottle of wine).
Choosing a Fiscal Representative
- Anyone who resides in Portugal can be a fiscal representative, but it’s recommended to choose a professional.
- Most people use a lawyer or continue using the law firm or company that obtained their NIF number for them.
- You want someone (or a company) that’s actually going to forward communications from Financas. Those fines aren’t childsplay.
What Happens if I Don’t Get One?
Here’s a fun fact for you: According to the Portuguese consulate in London, failing to appoint a fiscal representative when you need one could result in fines ranging from €75 to €7,500. Yikes!
The Portuguese Tax Department is known for its strict deadlines, often requiring a response within 10 to 15 days. This is why you don’t just need any old fiscal representative — you need one that’s going to forward you your correspondence ASAP.
You may even want to consider having a fiscal representative even if you live in the EU/EEA. This is because letters from Portugal sometimes take a few weeks to arrive.
2022 Rule Changes
Here’s some exciting news: As of June 2022, the rules have changed for the better. Previously, if you obtained a fiscal number while living in Portugal but then moved outside the EU, you were stuck needing ongoing fiscal representation. It was like a never-ending tax relationship you couldn’t break up with.
Now, you only need a fiscal representative if you have financial ties to Portugal (like property or a car) and are living outside the EU. So if you’re just a regular person who happened to live in Portugal for a while and then moved away, you’re off the hook!
Frequently Asked Questions
“Who needs a fiscal representative?“
If you are a non-resident of the European Union or European Economic Area and have financial ties or business in Portugal, you are required to appoint a fiscal representative. This representative acts as an intermediary between you and the Portuguese tax authorities (Serviço de Finanças), ensuring compliance with Portuguese tax laws and regulations.
“Who can be my fiscal representative?“
Any individual who is a resident and taxpayer in Portugal can serve as a fiscal representative. However, it is recommended to appoint a professional, such as a lawyer, who is well-versed in Portuguese tax law to avoid potential fines or charges due to misinterpretation of the regulations.
“How much does a fiscal representative cost?“
The costs vary depending on the firm. At the cheaper end of the scale, expect to pay less than €100 per year for ongoing fiscal representation. However, fees can go as high as €500 or higher.
Some law firms charge based on the amount of correspondence you expect to receive, but most just have a flatrate fee for all clients.
“Will having a fiscal representative make me a tax resident?“
No, having a fiscal representative won’t automatically make you a tax resident. However, if you have a property in Portugal or earn income in Portugal, you may have tax obligations in Portugal.
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