PORTUGUESE FISCAL NUMBER (NIF)
If you are intending to invest in property, apply for residence, carry on a business or establish any form of official presence in Portugal, the first step is to obtain a Portuguese fiscal number. A fiscal number is known in Portugal as a Número de Identificação Fiscal (NIF) and is sometimes also known as a Número de Contribuinte.
You will need to obtain a Portuguese fiscal number in order to:
- Buy or sell property in Portugal
- Inherit assets in Portugal
- Open a bank account in Portugal
- Set up utilities or telecoms in Portugal
- Buy a car or apply for a driver’s licence in Portugal
- Obtain a mortgage or other credit in Portugal
- Pay taxes in Portugal
- Receive income from work or a business in Portugal
- Receive social security benefits in Portugal
- Study in Portugal
FISCAL NUMBER APPLICATIONS
EU residents can apply for a fiscal number in person by visiting a local tax office (Financas) with some official identification (such as a passport or EU I.D. card), as well as a proof of address in their home country. The nine-digit number is issued instantly and is retained for life. Appointment of a Fiscal Representative is optional but for property owners it is advisable.
Non-EU residents are required to appoint a Fiscal Representative in order to request a Portuguese fiscal number and to be registered on their behalf for the receipt of any tax department correspondence.
Non-resident companies acquiring a property or setting up a branch in Portugal are required to obtain a fiscal number from the National Registry of Companies (Registo Nacional de Pessoas Colectivas) in Lisbon and must also appoint a Fiscal Representative. Known as a Número de Identificação de Pessoa Coletiva (NIPC), it serves as a corporation tax reference number, VAT registration number and company registration number.
Sovereign Portugal is ready to assist with all fiscal number applications.
A Fiscal Representative in Portugal acts as an interface between a non-resident individual or company and the Serviço de Finanças (Tax Department) on any tax matters relating to a client’s property and/or a client’s individual taxation.
Notifications from the Tax Department generally require a prompt response within 10 to 15 days. Non-receipt of such correspondence can therefore swiftly lead to tax problems for an individual. Non-receipt of property tax bills can lead to non-payment and the incurrence of fines and penalty charges.
As the Fiscal Representative, Sovereign will receive all Tax Department correspondence in respect of the affairs of clients and will act on behalf of clients to ensure that their fiscal responsibilities are fulfilled – submitting the necessary tax returns and paying all taxes.
To do this, Sovereign will provide any requested clarifications to the Tax Department, raise tax appeals, implement Double Taxation Agreement (DTA) provisions and ensure that tax payments are made within deadlines. We will also assist with any residence applications.
Many lawyers are no longer willing to assume this role and prefer to recommend specialist Fiscal Representatives such as Sovereign. Sovereign – Consultoria Lda has been able to build very close relationships with local tax departments, which enables us to keep up to-date with the ever-changing fiscal demands placed on both resident and non-resident clients.
QUESTIONS & ANSWERS
Who needs a Fiscal Representative?
Any non-resident individual or company resident outside the EU who owns property, holds a bank account or has any other commercial activity or interest in Portugal must by law appoint a Fiscal Representative that is registered with the Tax Department.
I have had my property for years, why do I now need a Fiscal Representative?
Global automatic exchange of information under the OECD’s Common Reporting Standard (CRS) went live in January 2016 and the first information exchange took place in 2017. Financial institutions in over 100 countries around the world now collect information on their clients and their accounts and pass that data onto the clients’ country of residence. It is now more important than ever to make sure you are correctly declaring your income and paying tax in the right country. It also means that Tax Departments in Portugal are better able to enforce the law that all non-EU residents who own property or hold a bank account in Portugal must appoint a Fiscal Representative, resident in Portugal.
I have had a fiscal number for years and I do not have a Fiscal Representative. Is this a problem?
This could mean that you are wrongly registered at the Tax Department as being resident in Portugal for tax purposes. As such you may be liable to declare your worldwide income in Portugal and pay taxes here! Any Tax Department correspondence could also be sent to the wrong address. If your IMI property tax bill is sent directly by the Tax Department to your Portuguese property, you are definitely registered as being fiscally resident in Portugal!
Sovereign is able to check your status and, if necessary, correct your registration.
Why do I have to pay a registration fee and in subsequent years an annual fee?
A registration fee is payable because Sovereign will need to attend the Tax Department and undertake substantial administrative work to obtain your fiscal number and register as your Fiscal Representative. You will not pay an annual fee in the year you register with Sovereign but, in subsequent years, we will charge an annual fee for ongoing fiscal representation.
Once Sovereign is registered as your Fiscal Representative, we will become the first contact for the Tax Department in respect of your affairs and when we receive any correspondence we will contact you for instructions. Sovereign will remain registered as your Fiscal Representative until such time as you cancel us directly at the Tax Department by registering as a Portugal or EU resident, or by appointing an alternative Fiscal Representative.
What does the annual fee include?
Sovereign’s fee gives you peace of mind that your fiscal affairs in Portugal are being correctly dealt with in a timely manner. You will be informed promptly about any matters arising from a property purchase or sale. Our fee covers the responsibility of acting as your Fiscal Representative in Portugal and includes the receipt and forwarding of your Municipal Tax bills. Many simple queries can be answered without charge, but additional fees will be charged for any extra work requested by you, either on a time-spent basis or as shown in our Fee Schedule.
What is not included in the annual fee?
Sovereign’s annual fee does not include the payment of your taxes, submission of tax returns or for time spent on research or dealing with other entities, if requested by you. You would be informed of any extra charges before any work is undertaken on your behalf.
What other work might arise for Sovereign?
Sovereign will handle all fiscal matters including Tax Department audits on the purchase or sale of properties, submission of tax returns, declaring rental income from your Portuguese property or assisting lawyers with property transfer tax (IMT). We will also assist with the provision of documentation for property sales, Tax Department property registration documents, payment of municipal taxes, advice on rateable property values, debts certificates, as well as corporate and individual accountancy services.
Why should I use Sovereign as my Fiscal Representative?
Sovereign has been advising resident and non-resident clients on all matters relating to property ownership in Portugal since establishing an office here in 1999. With our full complement of qualified accountants and bi-lingual administrative staff, we are able to keep up-to-date with the ever-changing fiscal demands placed on property owners.
Our regular contact with local Tax Departments and reputation for prompt, quality service has enabled us to establish good relationships with lawyers all over Portugal, who trust Sovereign to resolve fiscal matters for their clients.
We ensure that confidentiality is applied to all our work and that our fees remain competitive.