The obligation to submit the income tax return in Portugal applies to all those who are registered in Portugal as residents for tax purposes and are not exempted on the grounds of the amount or nature of the income.
We emphasise, as an example, that those registered in 2019 to carry out a business or professional activity will be obliged to fulfil this obligation, and must deliver Annex B or C, depending on whether they are covered by the simplified or organised accounting regime. Even if one has not earned income from category B, the fact that one keeps an open activity means that one must submit the return, stating that fact in the respective field in Annex B or C of the Model 3 declaration.
Foreign citizens or national citizens residing abroad may also be covered by this tax obligation. In effect, even if one is registered as a non-resident for tax purposes in Portugal, there may be an obligation to submit this declaration if one has earned income in this country during 2019. This situation includes property income or capital gains obtained in this country or the mere fact that one keeps an open activity.
We emphasise that the Portuguese Tax and Customs Authority has information regarding the operations of transfer of real estate located in Portugal, thus, if taxpayers not resident in this country do not declare the income earned, they will be notified to do so within the period stipulated by the Tax Office and will also be fined. We emphasise that, even if the foreign taxpayer has sustained a loss on the sale transaction, there is still an obligation to submit this declaration.
Capital gains earned by non-residents in Portugal for tax purposes can be optimised, considering that Portuguese courts have heeded taxpayers who challenge the settlement carried out by the Tax Authority applying the rate of 28% on the total capital gain, due to discrimination regarding residents.
The Tax Law department of Belzuz Advogados is available to assist you in complying with the tax obligation to submit the annual income tax return, confirming, in particular, whether the obligation is applicable to you, whether there is any cause for exemption and, in particular, whether tax savings opportunities exist.
Belzuz Advogados SLP
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