# Fiscal Representation in Portugal



## ipso jure

Indeed Good News....No need for a european union citizen to have a fiscal representative in Portugal :clap2:

European Court has considered that Portugal had discriminatory fiscal rules for non residents.

Portuguese tax office will start sending rates to european countries. should one not wish to pay for a fiscal representative every year, may simply go to the tax office counter and provide complete home address (in the foreign country). 

This new address will be the one used by the tax authorities in all notifications.


----------



## canoeman

Can you please post where this information has come from, our tax office certainly had no knowledge of it on Thurs? nor does the Financas site show anything.

Are you confusing this with the Court saying

" The European Court of Justice held, on 5 May 2011, that Portuguese provisions that oblige non-resident taxpayers who receive Portuguese-source income to appoint a Portuguese fiscal representative are in violation of the EC Treaty's free movement of capital rules, but not those required by the European Economic Area Agreement."

which at the moment wouldn't apply to non residents with a second home but only to non residents who receive an income.


----------



## ipso jure

Hello Canoeman,

There is no confusion as far as I know.

What I have been explained by my Lawyer, is that until such time legislation and forms are changed, tax office have internal instructions from central departments to proceed in this way.

Internal rules make reference to decision of European Court and unfulfilment of european treaty. 

Non residents are now free to keep fiscal representatives, or to change details in the tax number, takind out fiscal representative address and number and providing their foreign address, where they should be receiving all communications from the tax office. 








canoeman said:


> Can you please post where this information has come from, our tax office certainly had no knowledge of it on Thurs? nor does the Financas site show anything.
> 
> Are you confusing this with the Court saying
> 
> " The European Court of Justice held, on 5 May 2011, that Portuguese provisions that oblige non-resident taxpayers who receive Portuguese-source income to appoint a Portuguese fiscal representative are in violation of the EC Treaty's free movement of capital rules, but not those required by the European Economic Area Agreement."
> 
> which at the moment wouldn't apply to non residents with a second home but only to non residents who receive an income.


----------



## canoeman

"Non residents are now free to keep fiscal representatives, or to change details in the tax number, takind out fiscal representative address and number and providing their foreign address, where they should be receiving all communications from the tax office."

Sorry but little of that makes any sense to me, and appears totally contradictory, I appreciate instructions might take time to filter through, but last Thursday our Financas Office had no knowledge of any changes, neither can I find any reporting of such a fundamental change to current rules and regulations, which I would have expect as it is quite an issue with a lot of Non Residents.
I would disregard your lawyers information until there is an official announcement.


----------



## Frank Wilson

The European Court actually decreed this a couple of years ago. (If you go on to the EU site and search under Portugal Fiscal etc it does come up). But to my knowledge the Portuguese government have not acknowledged it or introduced it.


----------



## Frank Wilson

Couldn't find the EU doc tonite but these people are paraphrasing it

ECJ finds Portugal's Fiscal Representative requirement violates EU rules - Offshore News from The Sovereign Group


----------



## canoeman

The date of the judgement was the 5 May 2011 (C267/09) which is the quote I posted. 

The judgement appears to only apply to a NON Resident who receives an income from Portugal, not to a NON resident who does NOT receive an income, who will still reguire a representative..

If you are a NON Resident living in the EEA but not the EU you are still required to have a Fiscal Rep.


----------



## canoeman

I would think the most sensible course of action for a Non resident is to continue with a Fiscal Rep until the order has been implemented by Financas, the judgement is not 100% clear as there is no mention as I've said about second home owners. 

If you do a search ECJ C267/09 then there are some more in depth articles


----------



## lagosguy

"I would think the most sensible course of action for a Non resident is to continue with a Fiscal Rep until the order has been implemented by Financas, the judgement is not 100% clear as there is no mention as I've said about second home owners." 

Sorry; but I couldn't agree less. This has always been a state-sponsored scam and it is well past time for it to end. 

Does anybody seriously think that the Financas is going to rescind is existing instructions of its own accord, after the Portuguese Government has fought its case up to European Court level? And does anybody imagine that existing Fiscal Reps are going to inform their clients of a court ruling that is likely to put an end to their nice little earners? 

The ruling seems to be clear: that, if you are a non-resident property owner receiving taxable Portuguese income, then you are no longer required to have a Fiscal rep. If you aren't among those who rent out their properties, then simply open an interest paying savings account with a Portuguese bank and you will instantly become a receiver of Portuguese taxable income and you can save yourself a lot of money every year.

I fully intend to do that and will happily refer the Financas to ECJ C267/09 if they come knocking. Somehow, I suspect they won't. :clap2:


----------



## canoeman

I only disagree with your statement " state-sponsored scam" there where very good reasons for it's introduction, unfortunately lawyers, accountants and others quickly caught on that they could get away with ridiculous charges before their customers caught on, and moved their business, there are people and companies offering a good service at reasonable prices.

No I'm not one of them and will be quite delighted if family and friends can handle their own affairs.


----------



## dyerduck

*fiscal representation*



canoeman said:


> Can you please post where this information has come from, our tax office certainly had no knowledge of it on Thurs? nor does the Financas site show anything.
> 
> Are you confusing this with the Court saying
> 
> " The European Court of Justice held, on 5 May 2011, that Portuguese provisions that oblige non-resident taxpayers who receive Portuguese-source income to appoint a Portuguese fiscal representative are in violation of the EC Treaty's free movement of capital rules, but not those required by the European Economic Area Agreement."
> 
> which at the moment wouldn't apply to non residents with a second home but only to non residents who receive an income.


I was told by Tavira council last year that I did not require a fiscal representative and have paid my rates in person on 3 occasions. a neighbour was also told this.


----------



## canoeman

The ruling only came into effect this year maybe Tavira jumped the gun?_ rates_are payable to Financas not council as UK.

The latest information I have confirmed in the last 2 weeks is that HQ of Financas has informed all tax offices that a EU Resident *does not now reguire* a Fiscal Representative, are they all aware of it sadly no.

The problem still remains for a non Resident, Financas will not post any communication outside of Portugal, neither will CTT redirect, so unless you've made arrangements to have your post checked you should get online access to your tax account so you can regularly monitor, it might not just be the rates that Financas are after.


----------



## dyerduck

*fiscal representation*



canoeman said:


> Can you please post where this information has come from, our tax office certainly had no knowledge of it on Thurs? nor does the Financas site show anything.
> 
> Are you confusing this with the Court saying
> 
> " The European Court of Justice held, on 5 May 2011, that Portuguese provisions that oblige non-resident taxpayers who receive Portuguese-source income to appoint a Portuguese fiscal representative are in violation of the EC Treaty's free movement of capital rules, but not those required by the European Economic Area Agreement."
> 
> which at the moment wouldn't apply to non residents with a second home but only to non residents who receive an income.


 Recently there was an article in the Portugal news Magazine on fiscal representation and said that many property owners were risking fines of up to 5000 euros for not having fiscal representation. I wrote to the editor questioning the accuracy of the article he sent my letter to the author for comment. I received a reply from someone at a company called Gibro presumably the author saying, Following the european court decision it is not an obligation anymore to have fiscal representation as long as you are a European citizen.
You now have the option of using a fiscal representative or not bearing in mind that payment has to be done within the dead lines and that all documentation is in Portuguese. Tavira council told me last year that I did not need fiscal representaion. Incidentally I do not earn anything in Portugal am taxed in UK and pay all bills such as rates electricity etc direct.


----------



## canoeman

dyerduck said:


> Recently there was an article in the Portugal news Magazine on fiscal representation and said that many property owners were risking fines of up to 5000 euros for not having fiscal representation. I wrote to the editor questioning the accuracy of the article he sent my letter to the author for comment. I received a reply from someone at a company called Gibro presumably the author saying, Following the european court decision it is not an obligation anymore to have fiscal representation as long as you are a European citizen.
> You now have the option of using a fiscal representative or not bearing in mind that payment has to be done within the dead lines and that all documentation is in Portuguese. Tavira council told me last year that I did not need fiscal representaion. Incidentally I do not earn anything in Portugal am taxed in UK and pay all bills such as rates electricity etc direct.


Sorry but I'm not quite getting your point, I've updated my original response to question in May because at that time Financas in Portugal hadn't implemented the Court ruling.
As you point out taxes must be paid by certain dates, which is why I recommend that a non residents especially or a resident gets online access to keep a regular check on their Tax a/c, unfortunately you can't pay IMI (rates) by D/D, and I'm not totally certain but I don't think you can pay via internet either.


----------



## Ingles

Frank Wilson said:


> The European Court actually decreed this a couple of years ago. (If you go on to the EU site and search under Portugal Fiscal etc it does come up). But to my knowledge the Portuguese government have not acknowledged it or introduced it.


Now theres a surprise ,PT Gov ignore all EU directives (i.e Car Importation & Martric Tax's) that will slow down there Tax Grab


----------



## canoeman

Sorry but Frank Wilson got it wrong, yes the case about Fiscal Representation went to the European Court some time ago but the ruling wasn't given or published till May 2011, and although theres no big banners around proclaiming it* all* Financas offices have been told.

I wonder though how many of the companies offering Representation have told their clients?

Car Importation & Martric Tax's it's a total myth that Portugal is acting illegally and supposedly being fined because they earn more from taxes than fines. They operate within EU law.


----------



## lagosguy

dyerduck said:


> Recently there was an article in the Portugal news Magazine on fiscal representation and said that many property owners were risking fines of up to 5000 euros for not having fiscal representation. I wrote to the editor questioning the accuracy of the article he sent my letter to the author for comment. I received a reply from someone at a company called Gibro presumably the author saying, Following the european court decision it is not an obligation anymore to have fiscal representation as long as you are a European citizen.
> You now have the option of using a fiscal representative or not bearing in mind that payment has to be done within the dead lines and that all documentation is in Portuguese. Tavira council told me last year that I did not need fiscal representaion. Incidentally I do not earn anything in Portugal am taxed in UK and pay all bills such as rates electricity etc direct.


Can you remember when the article appeared, dyerduck, because there is a similar article on page 15 of this week's edition, which also has a reference to the Gibro Group at the bottom? For the paper to have published such a inaccurate article once would be bad enough; but I can hardly believe it would do so a second time, when you had already informed it of its error.

I was going to post about this week's Portugal News article and muse aloud about what might have prompted the News to publish it. Lazy journalism, was my first thought, until I remembered that I had emailed the News back in June suggesting that they might wish to publish an article on the ECJ ruling. I didn't get a reply. 

Then I thought about the company mentioned at the bottom of the article and wondered whether it might possibly provide Fiscal representation. If it does, then one can only speculate on why it would wish to be associated with an article that will have had the effect of undermining the ECJ ruling giving non-resident property owners the choice of whether or not to employ a Fiscal Rep to manage their tax affairs.

The Portugal News really needs to explain how it has got itself into this position. Does it for example publish sponsored articles, where it simply publishes copy provided by a third party for a fee without bothering to check it for accuracy? I don't know the answer; but if it does, then any article with a reference to a company at the bottom needs to be treated with the greatest caution.


----------



## canoeman

Does it for example publish sponsored articles, where it simply publishes copy provided by a third party for a fee without bothering to check it for accuracy?

probably a lot of info they carry is syndicated


----------



## lagosguy

*Portugal News correction*

I wrote to the Portugal News pointing out the error in their article relating to the claimed legal requirement to employ a Fiscal Rep and they have published a "correction" on their online site. 

"Fiscal representative correction
17/9/2011

In an article published on the Business Pages of the 10 September edition of The Portugal News under the heading ‘Fiscal Representation’, it was stated that home owners in Portugal without fiscal representation were liable to fines of up to 5,000 euros.

The article supplied to The Portugal News was based on a news item published slightly before the EU ruling in May 2011 banning the 5,000 euro fine and contrary to what was stated is in the article, is no longer applicable."

The News isn't, however, fully reporting the ECJ ruling. It didn't just ban the 5000 euro fine, it outlawed the requirement for non-resident taxpayers to employ a Fiscal Rep entirely. A cynic might think that the Portugal News - or more likely whoever provides it with advice on this subject - is still trying to frustrate the will of the ECJ by implying that the requirement still exists and it's just the fine that has been banned.

I wonder if the "correction" will appear in this week's edition, which is what most readers will see.


----------



## robc

canoeman said:


> I only disagree with your statement " state-sponsored scam" there where very good reasons for it's introduction, unfortunately lawyers, accountants and others quickly caught on that they could get away with ridiculous charges before their customers caught on, and moved their business, there are people and companies offering a good service at reasonable prices.
> 
> No I'm not one of them and will be quite delighted if family and friends can handle their own affairs.


I am with you on this canoe..................it was not a state sponsored scam, it was and still is eminently sensible, if you want to live in more than 1 country then you should have responsibility for your actions in all the countries you live in.

It has, I guess, neatly side stepped a lot of the issues countries such as Spain had/have with their second home-owner migrants/ residents.

Rob


----------



## lagosguy

"I am with you on this canoe..................it was not a state sponsored scam, it was and still is eminently sensible, if you want to live in more than 1 country then you should have responsibility for your actions in all the countries you live in."

Fortunately the ECJ didn't agree with you and banned the practice as illegal government discrimination against non-resident property owners. And what would you call illegal government discrimination against non-resident property owners, which had the effect of creating financial remuneration for Portuguese residents, if not a state-sponsored scam?


----------



## robc

lagosguy said:


> "I am with you on this canoe..................it was not a state sponsored scam, it was and still is eminently sensible, if you want to live in more than 1 country then you should have responsibility for your actions in all the countries you live in."
> 
> Fortunately the ECJ didn't agree with you and banned the practice as illegal government discrimination against non-resident property owners. And what would you call illegal government discrimination against non-resident property owners, which had the effect of creating financial remuneration for Portuguese residents, if not a state-sponsored scam?


The ECJ.........................hmmmmm I shall refrain from comment.


----------



## PedroCruz

Hello,

The tax issues are always very sensitive ones. When it comes to taxation, almost every country tries to get the most what one can. If you regard Double International Taxation (don't know if that the correct term) sometimes you have different countries fighting each other to get the right to tribute (there are some funny stories on this). The European court has brought some positive results on this area, because you can’t fight a Taxation Service other than in Court. And when it comes to a Government, sometimes the decision must come from abroad. The Tax representation was something absurd (in my point of view). About the ECJ, well, some better decisions others less, like any court.
Cheers


Pedro Cruz


----------



## niner_mike

Against EU law or not, I can hardly see why the fiscal represebtation rule was ever discriminatory - it aplied equally to portuguese nationals absent from PT for over 6 months as it did to foreigners (CIRS art 130) . Worth complaining about were some of the decisions applied as a result of the fiscal rep rule - eg refusal of IMI exemption for permanent residents who actually chose to retain a fiscal rep despite not being obligated to.


----------



## canoeman

A bit lost why would a Resident retain a Representative when it's not reguired, and this is probably why your office might have refused IMI exemption, they have probably decided the person can't then be a Resident.

Considering Portugal's Financial situation I can't understand why it wasn't one of the 1st things to be stopped, a far easier pill to swallow than some of the measures.


----------



## PedroCruz

Hello again,

Yes, the Portuguese law didn't discriminate (in that point of view) from Portuguese to foreign. I think the problem is the "Free movement of persons and capitals" thing. I don't see how it restricts anyone, you just had to have a representer. 
Never forgetting that politics is everywhere and that Portuguese governments tend to accept all European court decisions .....
In the other hand, it's a lawyers kind of dispute ..... what to say?!
We must understand that even we're a "European Union" and we're not one single country and there are differences. I'm even favorable of border control, even if you were obliged to let European citizens go thru, but, that way you would control non-European and Europeans with not so good intentions. But that’s a side discussion.
Thanks for sharing you opinion.


Pedro Cruz


----------



## lagosguy

I'm not sure I would agree that this was a political decision. 

The rationale for the ECJ's ruling was that requiring non-resident property owners to employ a Fiscal representative would make them liable for a (possibly considerable) financial cost. This cost was likely to serve as a deterrent to potential investors in Portugal and thus the court decided it would hinder the free movement of capital and persons.

The requirement was considered discriminatory, because the majority of resident taxpayers, who would not have to employ Fiscal reps would be Portuguese-born, while the majority of non-residents, who would have to employ one, would be foreign. Obviously there are be exceptions in both categories; but overall the rule was considered to discriminate against non-Portuguese.

The ECJ specifically considered the Portuguese government's argument that forcing non-resident property owners to employ a Fiscal rep would make it easier to ensure that they paid the required costs and taxes in respect of their property ownership. The court concluded that this was disproportionate and that the objective could be achieved by alternative means.


----------



## PedroCruz

Hello again,

The cost for fiscal / tax representation are extremely low, compared to the problems that might result from it. The last time I asked someone how did that, they were charging a ridiculous amount per month, I don’t think that would make someone think twice before investing in Portugal. It's a false reason. Anyway, I could agree, there are other ways of doing it. Tax it on the transaction (the sale), and you got it solved. 


Pedro Cruz


----------



## lagosguy

PedroCruz said:


> Hello again,
> 
> The cost for fiscal / tax representation are extremely low, compared to the problems that might result from it. The last time I asked someone how did that, they were charging a ridiculous amount per month, I don’t think that would make someone think twice before investing in Portugal. It's a false reason. Anyway, I could agree, there are other ways of doing it. Tax it on the transaction (the sale), and you got it solved.
> 
> 
> Pedro Cruz



Hi Pedro

I suspect that those who complained most about the requirement to employ a Fiscal rep were those like me, who own a property in Portugal but who also have a base outside the country where we spend most of our time each year.

When I bought my property, I arranged to pay all my utility bills, like gas, electricity, water, phone and broadband by direct debit. My only involvement with the Portuguese tax authorities was going to be my annual IMI payment and I planned to visit my apartment in late April, so that I could pay it in person just before the deadline. Yet I was told that this was not permitted and that I would have to employ a Fiscal Rep to pay my IMI for me. When I looked into the cost of employing a Fiscal rep for this one transaction, I was quoted an annual charge that was higher than the IMI itself! Not surprisingly I decided that this was ridiculous and, for the past 5 years I have taken care of it myself. 

I am sure that some Fiscal reps charge less than others; but I have seen posts by people who are paying extortionate sums each year for a service they neither want nor need. The ECJ ruling means that I (and they) no longer need fear a letter from the local Financas asking for details of my Fiscal Rep. 

My ongoing complaint is that most non-resident property owners employing Fiscal reps probably do not know that they now have the choice. Neither the Portuguese government nor the Financas have taken any proactive steps to publicise the change and I have not heard of any Fiscal reps voluntarily telling their clients about it. Worse still, the Portugal News published an article last week stating that it is still a legal requirement to employ a Fiscal Rep. When they were told that they had published out of date info, the News published a correction but only on their website. They didn't put anything in the paper itself, which is where the original mistake appeared and which is the edition the vast majority of readers will see. I admit to being a conspiracy theorist by nature; but in this case there seems to be a real desire to ensure that this ECJ ruling gets minimal publicity. 

Cheers
Ken


----------



## PedroCruz

Hello Ken,

I understand your point of view, but, not everyone is honest like you.
I don't do fiscal representation, due to the problems might come from it (and I was asked to do that).
Some people may pay more they should, but, again, I don't do it, because no money will pay the trouble, if any comes.
Hope there's more people like you, that likes Portugal, to the point of buying a house here.
As for the news .... no comments. I don't know how it goes in England, but in Portugal, it's usual.
As for the finanças, I understand you, but, being the finanças a state service, it's not up to them to inform about that (again, I don't know how it's done in other country’s). It would cause an immense fight between private company’s and the state ..... I don't earn anything from that, but, I think it's not their job to do it. 
I can't say you did it right, but, I can't see any harm form it.
Be careful with some double taxation, as you can have a foreign address, inform the finanças on that (to avoid some future problems ... never know).
Cheers


Pedro Cruz


----------



## niner_mike

Hi Canoeman, "A bit lost why would a Resident retain a Representative when it's not reguired, and this is probably why your office might have refused IMI exemption, they have probably decided the person can't then be a Resident."

I did retain a fiscal rep (our lawyer) for some time after I first became resident, purely as a belt & braces measure - she didn´t charge much & I appreciated her help in dealing with Finanças for us. Refusing IMI exemption I believe was a system "glitch" ie if a fiscal rep is registered in the system iy automatically assumes non-resident & cannot be peruaded otherwise.


----------



## canoeman

Which is what I suggested was the reason for not getting IMI exemption, they can be persuaded, the refusal could have just been down to the exemption not being requested or not being reguested within correct time, it's another of those timed procedures.

I did same belt and braces approach and got an account rather than a Solicitor as once purchase and registration with Financas is complete, your next dealings are going to be Fiscal.


----------



## Jester12

I can confirm that if you are not a Portuguese resident (as I am not) but you are a EU resident with an EU address, you no longer need a fiscal rep in Portugal. We were having some problems with our current fiscal rep and went to the Finance department in Logoa (in October 2013), where they were more than happy for us to remove the fiscal rep, make my wife and I our own fiscal reps and to use our UK postal address for correspondence (which you need to get your rates sent to you) and .... they did it for free !! Result..


----------



## Jester12

canoeman said:


> Sorry but I'm not quite getting your point, I've updated my original response to question in May because at that time Financas in Portugal hadn't implemented the Court ruling.
> As you point out taxes must be paid by certain dates, which is why I recommend that a non residents especially or a resident gets online access to keep a regular check on their Tax a/c, unfortunately you can't pay IMI (rates) by D/D, and I'm not totally certain but I don't think you can pay via internet either.


Yes you can pay Rates via the internet (I bank with Santander Totta but would expect other Portugues Banks to have the same facility), going into Internet banking should allow you to pay via the 'Pagamentos Estado' screen - where you enter the reference number and payment amount.


----------



## canoeman

Theres a slight danger in resurrecting old posts as they been superseded by fresh information, yes you can pay online but first as you say you reguire, Entity number
Reference & Amount but *you must have* a Portuguese Bank Accountant and it's surprising how many non Residents don't have one, as a belt and braces approach non residents especially should have online access to their Fiscal Account so if you/they don't receive a bill through post you/they can access and get the necessary numbers to make a payment, without the reference numbers it's impossible to make an online payment.


----------

