Joining the new system of electronic tax system as of July 1st will exempt emigrants living in countries outside the EU or European Economic Area from the obligation of a tax representative, the Ministry of Finance said today.
"Portuguese taxpayers living outside the European Union, Norway, Iceland or Liechtenstein [European Economic Area] will be able to join the new system on the Finance Portal as of July 1st," the Ministry of Finance said in a statement.
With this regulation, all taxpayers residing outside those countries can dispense with the need to appoint a tax representative, states the same information.
With regard to taxpayers residing in the United Kingdom, adherence to the electronic system on the Finance Portal can be made during the second half of 2022.
"Alternatively, if they choose not to adhere to this system, they may appoint a tax representative until December 31st, 2022, without any penalty," says the Ministry of Finance, saying that the obligation to appoint a tax representative is suspended until the end of this month, regarding UK residents.
The appointment of a tax representative is mandatory for all holders of a Tax Identification Number (TIN) who are resident in countries outside the European Union (EU). Due to Brexit, this now encompasses Portuguese emigrants living in the United Kingdom.
The adherence to this system may be made on the Finance Portal.
Taxpayers resident abroad who do not maintain any legal-tax relationship with the country are now exempt from having to appoint a tax representative in Portugal, the Ministry also stated.
In a recent letter circulated on the clarification of procedures regarding the fiscal representation of non-residents, to which Lusa news agency had access, the Tax and Customs Authority (AT) details the situations in which the taxpayer is exempt from the obligation to appoint a fiscal representative.
"A citizen who, cumulatively, does not have tax domicile in Portugal or in the European Union or the European Economic Area (Norway, Iceland and Liechtenstein), does not meet the legal requirements for resident tax status, is not subject to tax in the light of the provisions of paragraph 3 of Article 18 of the LGT and is not subject to compliance with obligations or intends to exercise any rights with the tax administration, is not required to appoint a tax representative," reads the document.
"When registering and attributing a TIN to a national or foreign citizen, as a non-resident, with an address in a third country, that is, a country that does not belong to the European Union (EU) or the European Economic Area (EEA), it is not mandatory to appoint a tax representative," it continues.
The document points out that the appointment of a tax representative becomes mandatory, "if, after being attributed a NIF as a non-resident and while residing in a third country, he or she becomes the subject of a legal tax relationship, namely, if he or she owns a vehicle and/or a property registered/situated in Portuguese territory, enters into an employment contract in Portuguese territory, or exercises an activity as a self-employed person in Portuguese territory".
Similarly, "citizens who declare residence in a third country and who are subject to a tax legal relationship, must appoint a tax representative (natural or legal person)", when they have a tax relationship, i.e. if they own a car or property, have an employment contract,or are self-employed in Portuguese territory.
"In these situations, the appointment of the tax representative must be made within 15 days of the change of address to a third country," the document states.