In 2002 it became obligatory for non-resident individuals or companies, who owned property in Portugal, to appoint a fiscal representative to receive tax department correspondence and to ensure fiscal compliance.
In 2011, the European Court of Justice ruled that EU nationals could not be forced to have fiscal representation, because this violated the rights of free circulation of people and capital. However many chose to retain their representative for peace of mind.
So will UK nationals who are resident in Portugal once again be required to appoint a fiscal representative after Brexit? The law clearly states that those who live outside the EU must appoint a representative, so it follows on UK residents will need to have a fiscal representative in Portugal. The onus is on taxpayers to be aware of and to comply with the law.
Currently EU residents without representation automatically receive their tax department correspondence, including their property tax bills, at their EU address.
Sovereign believes that after Brexit, tax correspondence will no longer be sent to the UK because the system is not automated to send to non-EU countries. It is therefore expected that correspondence will be retained by the Lisbon tax department, which is the office designated for EU residents who have opted not to appoint a representative.
Portuguese property owners that do not receive their correspondence will potentially fail to pay their taxes or respond to notifications, risking fines and penalties. By the time the UK officially leaves the EU on 29 March, it may be too late to receive the 2019 property tax bills in the UK.
It is therefore advisable to appoint a fiscal representative to avoid possible future complications. Sovereign is offering a special deal to new UK customers by cutting the fiscal representation registration costs by 50% for those registering with them before the end of January 2019.
Since 1999 Sovereign – Consultoria Lda personnel has built a very close relationship with local tax departments and other institutions, which enables us to keep up to date with the ever changing fiscal demands placed on resident and non-resident clients. With offices worldwide, the Sovereign Group is able to assist clients with all their fiscal queries, aiming to maximise clients’ tax benefits and minimise liabilities.
For more information, contact Sovereign today.