Those wanting to relocate or invest in Portugal will soon discover that they first need to obtain a Portuguese Taxpayer Identification Number and, depending on their circumstances, appoint a tax representative in Portugal.
A tax representative in Portugal is a natural or legal person who is a resident of Portugal for tax reasons and agrees to function as a liaison between the non-resident taxpayer and the Portuguese Tax and Customs Authority. If the non-resident taxpayer conducts VAT-exempt business in Portugal, the fiscal representative must also be a VAT-exempt taxpayer in Portugal.
The fiscal representative must comply with the following:
- Report on his tax liabilities to his represented party.
- Maintain communication with the represented taxpayer regarding the legal dates for meeting its tax liabilities.
- Receipt of fees and taxes payable from the represented party and submission to the Portuguese Tax and Customs Authority.
- Assure compliance with all of its represented taxpayer’s tax obligations in Portuguese territory.
- Intervene on behalf of the represented taxpayer as necessary, ensuring the latter’s tax rights
Should you decide to become a tax representative for a friend or family member to assist with their relocation to Madeira, be sure to talk with a lawyer or a board-certified accountant to understand the implications of said appointment better. As the abovementioned responsibilities imply, a tax representative must be highly qualified and proficient in Portuguese law.
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Is appointing a tax representative in Portugal compulsory?
As per information provided by the Portuguese Tax and Customs Authority: “A citizen who, cumulatively, does not have a tax domicile in Portugal or the European Union or the European Economic Area (Norway, Iceland and Liechtenstein), does not meet the legal requirements to have the tax status of resident, is not a taxable person, in light of the provisions of paragraph 3 of article 18 of the Portuguese General Tax Law and is not subject to the fulfilment of obligations or intends to exercise any rights with the tax administration, is not obliged to appoint a tax representative”.
However, the Portuguese Tax and Customs Authority is not following the abovementioned practice, based on our experience. This means that the Portuguese Tax and Customs Authority demands the appointment of a tax representative for all non-resident taxpayers.
At MCS, we can assist you with your tax, immigration and investment matters in Madeira territory. This article is provided for general information purposes only and is not intended to be, nor should it be construed as, legal or professional advice of any kind. Should you have any questions, please do not hesitate to contact us.