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?).
What on Earth is a Fiscal Representative?
If you have fiscal ties to Portugal (e.g. you own a property there) you may need to have a fiscal representative. This is someone that acts as a point of contact between you and Finanças (the Portuguese tax authority).
Let’s say that you own a property in Portugal. One day Finanças (the Portuguese tax authority) wants to send you a letter about some taxes that you owe.
- If you are resident in Portugal, Finanças will send that letter to your Portuguese address.
- If you are resident in the EU, Finanças will send that letter to your EU address (e.g. an address in France or Spain).
- If you are resident outside of the EU (e.g. you live in the US or UK), Finanças won’t be willing to send you that letter to your non-EU address. However, they will send that letter to your fiscal representative (a company or person resident in Portugal who’s willing to act as your point of contact between you and Finanças).
Basically: A fiscal representative is essentially your “person on the ground” in Portugal. They act as a middleman between you and Finanças, making sure you don’t miss any important tax-related communications. Think of them as your Portuguese tax guardian angel.
Do I Actually Need One?
Now, here’s where it gets interesting. You might need a fiscal representative if:
- You own property in Portugal but live outside the EU/EEA
- You have a Portuguese car
- You earn income in Portugal (maybe from that cute Airbnb you’re renting out?)
- You’re applying for a Portuguese NIF number (Número de Identificação Fiscal) from outside the EU/EEA*
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.
*Some companies include one year of fiscal representation with their service while others (e.g. Novomove) remove the need for fiscal representation by signing you up for electronic notifications.
What are the costs involved?
Now, I know what you’re thinking – “Great, another expense!”
While any Portuguese resident can technically be your fiscal representative (hello, new Portuguese best friend?), many expats for professional services. Why? Because you want to make sure you get any notices about your house, car, or any other fiscal ties you have to Portugal.
In terms of cost, professional services typically charge a one-time fee for obtaining your NIF (which you’ll need for pretty much everything in Portugal), plus an annual fee for ongoing representation.
Prices can vary wildly, from around €50 to as much as €1,000 per year. On average, you’re looking at about €200 for the NIF and another €200 annually for representation.
E-residence.com offers fiscal representation if you already have a NIF or they can obtain a NIF and this includes one year of fiscal representation. Use the code PORTUGALIST to get a 25% discount.
Are the services that charge €500 or €1,000 better? It doesn’t make a huge difference in obtaining the NIF, but you don’t want a company with such poor customer service to be your point of contact with Finanças.
Changing Fiscal Representatives
Many people get stuck in a situation where they’re paying ongoing fiscal representation at hundreds of euros per year. Thankfully, it’s possible to cancel your fiscal representation and assign a new, more affordable fiscal representative (such as E-Residence).
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!
FAQs
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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