Let’s say that you own a property in Portugal. One day Finanças (the tax office) wants to send you a letter, perhaps about some taxes that you owe.
- If you are resident in Portugal, Finanças is happy to send that letter to your Portuguese address
- If you are resident in the EU, Finanças is happy to send that letter to your EU address
- If you are resident outside of the EU, Finanças won’t send a letter to your non-EU address.
A fiscal representative is a person or company that acts as a liaison between a non-resident individual or company and Serviço de Finanças.
The types of people that might need a fiscal representative include:
- Those from outside the EU/EEA who are applying for a NIF number (companies like Bordr, for example, can obtain a NIF and this includes one year of fiscal representation)
- Those who have financial ties to Portugal (e.g. own a Portuguese car or property) but who are resident outside of Portugal and the EU
- You have a business in Portugal or you earn income in Portugal subject to Portuguese income tax (IRS)
As of June 2022, Finanças has changed its rules slightly and for the better. Previously, if you obtained a NIF and lived in Portugal but then moved outside of the EU (e.g. to the US or UK), you would need ongoing fiscal representation in Portugal. You couldn’t simply cancel your NIF: you either had to find a friend resident in Portugal to be your fiscal representative or pay a company to be that representative. Most companies charge around €200, and to continue paying this for life was a big cost.
Thankfully, the rules are slightly different now. Now, you only need a fiscal representative if you have financial ties (e.g. a car or a house in Portugal) and are resident outside of Portugal or the EU https://www.theportugalnews.com/news/2022-06-08/appointment-of-a-tax-representative-no-longer-mandatory-for-those-with-no-tax-obligations-in-portugal/67784?src=newsletter-09/06/2022.
What are the costs involved?
You don’t need to pay a lawyer for fiscal representation – anyone who’s a resident in Portugal can be your fiscal representative – but many people who aren’t resident in Portugal choose to use a lawyer. Well, they don’t choose: if you’re moving to Portugal, you usually don’t know anyone you can ask to be your representative.
Most lawyers charge a fee for obtaining the NIF (normally required) and then an ongoing annual fee for fiscal representation. This is because being a fiscal representative carries certain obligations and the person or company can be held liable. This is typically something like €200 for the NIF and then €200 per year for fiscal representation, although fees vary from around €50 to as much as €1,000.
Bordr.io, as mentioned, charges $150 to obtain a NIF (or $140 when you use this link), which includes 12 months of fiscal representation. After that, and assuming you don’t cancel your subscription, they will bill you €150 once per year for ongoing fiscal representation. Any correspondence from Finanças will be forwarded digitally.
E-residence.com is cheaper, and they also offer fiscal representation if you already have a NIF. Fiscal representation on its own costs €99 per year or, if you don’t already have a NIF you can order one with a year’s fiscal representation starting from €99.
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.
According to the Portuguese consulate in London, failure to appoint a fiscal representative could result in fines ranging from €75 to €7,500.