The Portuguese Tax Authority has adjusted its requirement for non-resident taxpayers to appoint a tax representative.
Circular Letter no. 90054 of 6 June defined that appointment of a tax representative was mandatory if, after the allocation of a taxpayer number as a non-resident and as a resident in a third country, the taxpayer became subject to a tax legal relationship in Portugal. In a nutshell, anyone holding a NIF (Portuguese tax number) but with tax residence in another country, or who has been out of Portugal for more than six months, must appoint an in-country representative. (This is optional for EU or European Economic Space residents (EU, Norway, Iceland and Liechtenstein).)
This rule would apply, for example, when the non-resident taxpayer: owns an entity or property in Portuguese territory; has an employment contract in Portuguese territory; or undertakes self-employment in Portuguese territory.
Following Brexit and concerns from the high number of UK citizens with interests in Portugal, the Portuguese Tax Authority has now considered widely used technology and amended this requirement.
Circular Letter no. 90057 of 20 July states an alternative and provides clarity.
“If the taxable person, resident in a third country, subscribes to any of the dematerialized notification channels (electronic notifications and citations system on the Tax Authority’s website or to the electronic mailbox), they are dismissed from the obligation to appoint a tax representative.”
Non-resident taxpayers are not obligated to hire a tax representative if they subscribe to the Tax Authority’s website and receive its updates and notifications.
However, taxable persons carrying out activities as an independent worker within Portuguese territory are not affected by this change – the obligation to appoint a tax representative remains. This representative must be a tax resident and must be subject to VAT.
If you have any queries on this or any other aspect of business-related Portuguese taxes, simply get in touch with our experts in Lisbon.