Tax representative in Portugal: what is it and when do you need one?

If you are a non-resident carrying out business activities in Portugal, tax representation is a concept you should be familiar with.

A tax representative will be responsible for representing you before the Portuguese tax authorities: essentially, they are your legal intermediary in tax and customs matters.

However, in which cases is it compulsory to appoint a tax representative? What will their responsibilities be?

In this article, you’ll find everything you need to know about tax representation in Portugal.

When is it necessary to appoint a tax representative?

Any non-resident who is liable to pay tax in Portugal must register with the Portuguese Tax Authority using a tax identification number (NIF).

When applying for a NIF (see our article “How to obtain a NIF in Portugal”), you will need to provide proof of residence, either in Portugal or abroad.

Until 2022, not having tax residence in Portugal meant that you were required to appoint a tax representative in Portugal (a Portuguese tax resident) to act as an intermediary between the non-resident and the tax authorities.

This is no longer the case, as the Portuguese Government has introduced legislative changes that remove the need for non-residents to appoint a tax representative in Portugal in most cases.

It is true that the Portuguese Government has removed the requirement to appoint a tax representative, but it has not removed the benefits and advantages of choosing to do so nonetheless.

What is a tax representative in Portugal?

A tax representative in Portugal acts primarily as an intermediary between a non-resident individual and the Portuguese tax authorities. Although the tax representative is not responsible for paying the taxes owed by the person they represent, they ensure compliance with the tax obligations to which the latter is subject, namely:

• receiving correspondence sent by the Portuguese tax authorities; and
• fulfilling all necessary tax obligations, in particular the submission of tax returns and the exercise of the client’s rights before the Portuguese tax authorities, including the right to lodge complaints, appeals or objections.

There are cases where appointing a tax representative in Portugal is mandatory

Any non-resident who is liable to pay tax in Portugal must register with the Portuguese Tax Authority using a tax identification number (NIF).

When applying for a NIF (see our article “How to obtain a NIF in Portugal”), you will need to provide proof of residence, either in Portugal or abroad.

Until recently, not having tax residence in Portugal meant that you were required to appoint a tax representative in Portugal (a Portuguese tax resident) to act as an intermediary between the non-resident and the tax authorities.

This is no longer the case, as the Portuguese Government has introduced legislative changes that remove the need for non-residents to appoint a tax representative in Portugal in most cases.

It is true that the Portuguese Government has removed the requirement to appoint a tax representative, but it has not removed the benefits and advantages of choosing to do so nonetheless.

Do non-residents in Portugal pay tax?

Non-residents in Portugal are liable to pay tax on income earned in Portugal. This includes dividends, capital gains, interest, royalties, salaries, income from professional or property-related activities, and pensions, amongst others.

What is the deadline for appointing a tax representative in Portugal?

The general deadline for appointing a tax representative in Portugal, or for registering with one of the digital notification channels, is 15 days.

Where this requirement is not met, fines ranging from €75 to €7,500 may be imposed, along with restrictions on the right to lodge administrative and judicial appeals.

What are the advantages of appointing a tax representative?

By opting for one of the digital communication channels instead of appointing a tax representative, the taxpayer undertakes and agrees to be notified exclusively via these channels. 

Consequently, taxpayers who opt for this option should be aware that this requires them to check these digital channels very frequently, to ensure that notifications are duly received and that any deadlines set out in communications from the Portuguese Tax Authority are met.

In this regard, we would like to emphasise that Portuguese tax legislation provides that, in most cases, taxpayers are deemed to have been validly notified five days after the digital communication has been made available; in other words, there is an administrative presumption that the communication has been duly received and acknowledged by the taxpayer.

To avoid any problems or legal penalties, it is crucial that you correctly fulfil your tax obligations in Portugal.

NEWCO is ready to act as your tax representative in Portugal and assist you in meeting your tax obligations in this country.