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Making sure that you have all the info you need about all things fiscal
What exactly is a NIF? Who is a fiscal representative? And where do you get them?
If you have been to Portugal before you have more than likely been asked if you would like a receipt with your número de contribuinte at the supermarket or café. If you don’t speak the language, you have probably just smiled at this question and said no thank you, I know I did the first few times! What is the right answer in this situation and what exactly are they asking for? Read on to find out about what you need a número de contribuinte for, where to get one, when to use it and discover who needs a fiscal representative and why.
A número de contribuinte is a Portuguese fiscal number, also known as a número de identificação fiscal or NIF for short. You will need a NIF if you:
- Are buying or selling property in Portugal
- Inherit assets in Portugal
- Open a bank account in Portugal
- Set up utilities or telecoms in Portugal
- Buy a car or apply for a driver’s licence in Portugal
- Obtain a mortgage or other credit in Portugal
- Pay taxes in Portugal
- Receive income from work or a business in Portugal
- Receive social security benefits in Portugal
- Study or work in Portugal
- Applying for residence
- Own a business or have any form of official presence in Portugal
A NIF is a nine-digit number that, once issued, is yours for life. As an EU resident, you can apply in person for your NIF at the local tax office (Finanças) with copies of your passport or EU identity card, as well as proof of address in your home country. It is this 9 digit number that the cashier is asking for at the check-out. In certain cases, you can get money back on your end-of-year tax return on certain purchases or services used, so giving your number each time you make a purchase is never a bad idea.
FISCAL REPRESENTATION
Up until July 1st 2022, anyone living in countries outside the EU or European Economic Area who paid tax in Portugal, owned property or car, held a bank account or had any other commercial activity or interest in Portugal were required to appoint a Fiscal Representative to request a Portuguese fiscal number and receive tax department correspondences.
But what, or more importantly who are they?
A Fiscal representative can be anyone resident in Portugal. It could be a friend or family member, as long as they accept the responsibility of receiving communications and dealing with your taxes. You can nominate your Fiscal Representative on the Finanças portal - as long as you and they are registered. You will need to know their NIF and they will need to accept the nomination online. If you do not have friends and family willing to take this role on, you can nominate someone like an accountant, solicitor, lawyer or specialist in the field.
Your fiscal representative will act as a link between you and the Serviço de Finanças (Tax Department) on any tax matters relating to your property and/or individual taxation. They will receive all correspondences from the tax department and, if you choose to engage the assistance of a specialist company or lawyer etc., will act on your behalf to handle all fiscal matters including tax department audits on the purchase or sale of property, submission of tax returns, declaring rental income from your Portuguese property or assisting lawyers with property transfer tax (IMT.) They will also assist with the provision of documentation for property sales, tax department property registration documents, payment of municipal taxes, advice on rateable property values, debts certificates, as well as corporate and individual accountancy services.
It is becoming more common that non-residents choose a specialist fiscal representative to handle things, mainly for peace of mind. They will charge a registration fee and in subsequent years an annual fee for ongoing fiscal representation. Once registered as your Fiscal Representative, they will become the first contact for the tax department in respect of your affairs and when they receive any correspondences, they will contact you for instructions. They will remain registered as your fiscal representative until such time as you cancel them directly at the tax department by registering as a Portugal or EU resident, or by appointing an alternative Fiscal Representative.
However, as of July 1st 2022, this group of people can now activate their electronic tax system in the finances online portal and in doing so will become exempt from the obligation of appointing and paying for a tax representative, the Ministry of Finance said today.
If you want to take advantage of this new ruling, click here, log into the finances portal and you will be taken to the relevant page to activate the electronic tax system.
If you are reading this but don’t want to activate the system you can still appoint a tax representative until December 31st, 2022, without any penalty.
You can read the law here.