Tax declaration in Portugal
Ouch, we’re in the middle of the IRS reporting period in Portugal, taxes! I decided to write you a page that can be useful whether you are an expatriate or not. If you already live in Lisbon or elsewhere, you’ll have to fill in your tax return before May 31st, otherwise you’ll have problems with the administration: this page will help you to do it yourself. If you are not yet an expatriate and you are in the middle of a lot of questions, then this article will give you an idea of what to expect!
If your main residence is in Portugal and you are retired, don’t hesitate to apply for a Portuguese NHR. An advantageous status that will offer you a tax exemption for a non-renewable period of 10 years.
If, on the other hand, you are employed or self-employed in Portugal, you will have to complete your tax return. This can be complicated the first time and the following times. We can help you through this administrative process.
The declaration of your IRS can be done directly online on the Portal das finanças. An access to your Portuguese financial administration space will allow you to fill in your tax return but also to obtain information about your income and expenses.
When making purchases, you will be asked for your contributory number, which allows you to record your expenses and categorise them in this Finanças space. It is important to transmit your TIN when making purchases, this will also allow you to participate in the annual lottery (each purchase over the year will constitute a lottery ticket) or to automatically obtain tax reductions on real estate or health expenses.
Tax return by a English-speaking accountant
The tax declaration in Portugal is not always as simple as I describe below since you may be in a special case: multiple income including some foreigners, if you never gave your Tax Identification Number when you made your purchases, if the declaration concerns a company in Portugal, if you are not very comfortable with a computer or if you simply do not meet the necessary requirements to benefit from this service. These are specific cases in which validating the figures indicated on your account in the Portal das Finanças will not be enough. You may have to fill in specific forms for your IRS or you may have to carry out special arrangements in order to achieve the most advantageous taxation possible.
For example, I am accompanied by a english-speaking professional accountant in Lisbon for my personal or professional tax returns.
If you are in a situation for which you think you need to be accompanied to make your tax return by a english-speaking accountant in Lisbon, you can contact me using the button below, briefly explain your needs and I will transmit them to a english-speaking accountant and chartered accountant in Lisbon who will accompany you in your steps. Be careful, his services are of course not free of charge.
Declaration of your Portuguese income
You’re lucky because this year and the one where everything is easier. Indeed, the declaration of taxes in Portugal since this year can be done entirely online (under certain conditions). This does not mean that you will understand the forms in Portuguese better if you don’t master the language, but that it can be done from home and behind your computer. That’s a good start, isn’t it?
You should know that in Portugal, when you make expenses throughout the year, you are systematically asked for your Portuguese Tax Identification Number (you know, the famous TIN) I strongly advise you to transmit it for two reasons:
- The more purchases you make with your TIN, the more tickets you have for the annual lottery: 3 Portuguese people have the chance to be drawn and win between 25 000€ and 50 000€.
- These expenses are recorded in your account, classified and allow you at the end of the year to be reimbursed according to the type of expense
Measures put in place by the Portuguese government to ensure that everyone keeps track of their financial transactions. You tell me, what does this have to do with my IRS statement? Well, it has to do with the fact that the sooner you fill out your return, the sooner you get those refunds, which over the course of a year can be quite substantial. The reporting period is between April 1st and May 31st, so now that everything can be done online, I would advise you to do it as soon as possible.
Portal das Finanças: financial authorities in Portugal
This is where it all happens for the declaration of your taxes in Portugal: the portal das Finanças (Website here). To start the procedure you will need to log in with your Portuguese TIN and the password you received by mail when you registered. If you are not yet registered, then you can click on “Novo Utilizador” and register with :
- Your email address
- Your Portuguese phone number
- Your Portuguese bank account information or your IBAN
- Your Portuguese Tax Identification Number
- Your residence address in Lisbon or elsewhere in Portugal
For information, your computer must have the latest Java update. This is important, otherwise you will not be able to access the forms in case of a first declaration.
Fill in the form, preferably ticking the SMS notifications: they will allow you to follow the process of obtaining your access codes. You should know that you will receive them by mail normally within 15 days. So if you are already late with your declaration and as it sometimes happens in Portugal that you don’t receive the administrative mail at first, I advise you to go to the local Finanças and ask for an emergency access code.
Once you have obtained your codes, you will finally be able to connect to the Portal das Finanças and access the IRS Automatico (Automatic IRS Declaration) section.
If you have just started your life in Lisbon, then you will probably have to fill in your first declaration and go to the section “Entregar Declaração”. I remind you that the automatic declaration simply consists of verifying and validating the information listed in your Finanças account (via your TIN throughout the year or previous information) and which allows you to deduct the amount from your tax.
Portuguese IRS statement online
This is where we get to the heart of the matter and you can start the process of declaring your income. Once you have gone to the “IRS Automatico” section, you will arrive at a household identification page. This is where all your information is listed and where you will have to inform the Portuguese financial authorities of the number of people in your household.
Indicate in the red box if you wish to include other people in your household in your IRS return (Your partner and children). You will then get a summary of your income and expenses. Make sure that everything looks OK. If your income figures don’t look right, then you will need to make an IRS return entry, Template 3, in order to submit your figures manually. If everything looks good, continue the process.
You will find below the details of the pre-liquidação. You will have several frames like the one presented below, you just have to choose the most advantageous one. In my case there was no difference and it will probably be the same for many of you.
Once you have chosen the best option and before accepting, you can tick one of the two small boxes (or both) “Indicates pretende consigar”, to give 0.5% of your IRS or 15% of the IVA (VAT in Portugal) to a Social Solidarity Institution of your choice. In this case, you will need to bring your IBAN and fill it in at the desired location.
Once you have accepted, you arrive at the last step:
In case you have money to collect, you will have to indicate your IBAN in the red box number 1. You will then be able to tick the box indicating that you have read and accept the conditions (Box 2), then tick “Confirm” (Box 3). And there you have it, you have just made your IRS declaration in Portugal online.
Portuguese automatic IRS: for whom?
Unfortunately for the year 2018 in any case, not everyone can access the IRS Automatico in Portugal. Indeed, a number of conditions must be met, some of which you will find below :
- To have resided in Portugal throughout the year
- Do not hold a status of Non Habitual Resident in Portugal
- Have earned income only in Portugal
- Not having benefited (or being entitled to) any tax benefits, except those related to donations
Please note that if you do not confirm your provisional automatic tax return, it will be considered permanent and validated by the Portuguese administration.
For those who are fluent in Portuguese, you will find all the necessary information and conditions to benefit from the service at this address.
For more information on general taxation, you will find all the details of taxation in Portugal here
Income tax rates in Portugal
You will find below the tax scale according to your income in Portugal, which is not applicable if you obtain the status of Non Habitual Resident:
- Less than 7035 euros: 14.5%.
- Between 7035 and 20,100 euros: 28.5 %.
- Between 20,100 and 40,200 euros: 37%.
- Between 40,200 and 80,000 euros: 45%.
- Above EUR 80 000: 48%.
Please note that this schedule is for information only, rates may change and it is your responsibility to check the official Portuguese websites for the new rates in force.
Assistance with tax declaration in Portugal
By validating the contact form, you authorize me to forward your request to an English-speaking person who will be able to contact you directly. This person is a professional who offers paid services whose price varies according to your requests, needs and projects. Nothing is automated: these are people I know, based in Lisbon and who are qualified to accompany you in your approach & your project.
Essencial Portugal is a website that connects individuals/companies with trusted, certified professionals in Portugal to carry out projects in the country. Only these certified and approved professionals are able to inform you, offer and invoice these services.