124-E Fiscal Representation

You may have heard already that the Portuguese Government now has taken serious measurements to ensure that taxes like I.M.I. (Rates or council tax), Mais-Valía (Capital Gains Tax) and I.M.T. (Transfer tax or Stamp duty) are really paid and collected.

For the non Portuguese property owner, they have now enforced a law that stipulates that every non Portuguese individual or company purchasing, owning or selling a property in Portugal must appoint a Fiscal Representative and this appointment must be registered in the local Tax Department.

Each entity is now starting to insist on the application of the law and soon it will be impossible to do any purchase or sales transaction without the fiscal representative being known to the authorities.

The law insists that a fiscal representative must be a Portuguese national, holder of a Portuguese Residency Permit or a Portuguese company set up for this purpose. It is easy to understand that almost no Portuguese individual, friend, estate-agent, lawyer or solicitor is prepared to put his/her own assets at risk by acting as a Fiscal Representative for a third party foreigner he/she hardly knows.

The Fiscal Representative will receive all correspondence from the Finançes relating to tax on the property and property owner and takes on all responsibility on behalf of the registered property owner for all payments to the D.G.T. (Tax department) of Income tax (I.R.S.), stamp duty (I.M.T.), Corporation tax (I.R.C.), Capital Gains Tax (Mais Valía), Council Tax (I.M.I.), Presumed Rental Income Tax (I.R.S. or I.R.C.) and Value Added Tax (I.V.A).

The F.R. (Fiscal Representative) will be liable for submission of all annual Tax Returns and will be ultimate responsible for ensuring payment of any tax liabilities to the Portuguese authorities that pertain to the property and registered owners of the said property.