The results of this audit from the
Inspectorate General of Finance (IGF) showed that "the majority of the representatives
in the sample (56 percent) had no open activity, nor declared income compatible
with the high number of represented people". Moreover, "71.6 percent
of these did not appear on any tax return in that period".
In addition, the IGF states that "the tax
authority has not identified, or timely assessed the risk of omission of income
by tax representatives, and has not yet adopted structural measures to change
this reality", which it classifies as "high risk".
Change
of law
Given this situation, the IGF has made several
recommendations, one of which is addressed to the Government to change the law
in order to "establish that the function of tax representative and manager
of assets or rights can only be carried out by taxpayers whose tax situation is
regularised".
In the recommendations addressed to the AT,
the IGF includes the adoption of control and monitoring mechanisms to identify
whether taxpayers representing a high number of foreign citizens "have an
open activity compatible (in view of their nature and/or declared income) with
the work they are doing".
The rules that say when a citizen needs to
appoint a tax representative have changed this year and the range of situations
where this is mandatory has been reduced.
Currently, it is compulsory to appoint a tax
representative after being given a NIF as a non-resident, the person has a
legal tax relationship with Portugal, which means if they own a vehicle or
property in Portugal or have an employment contract or are self-employed in
Portugal.