June 30, 2022:
Withholding Tax on Pensions Earned in Mainland Portugal and in the Azores
On 27 June 2022, Despatches no. 7870-D/2022 and no. 7870-E/2022 were published, approving the withholding tables for pensions earned in the Autonomous Region of the Azores and Mainland Portugal, respectively.
The State Budget Law for the year 2022 foresees an extraordinary update of pensions, effective from 1 January 2022, which will be made by the value of €10.00 per pensioner, for those whose total amount of pensions is equal to or less than 2.5 times the value of the social support index (IAS), and the value of the regular annual update, made in January 2022, will be incorporated in the value of the extraordinary update.
These tables apply to pensions, paid or made available on or after 1 July, of pensioners residing in the corresponding territories.
Retroactive amounts paid or made available to pensioners are subject to an autonomous withholding, and cannot be added, for the purpose of calculating the Personal Income Tax (IRS) to be withheld, to the pensions of the months in which they are paid or made available. The withholding rate to be applied to retroactive payments is the one that corresponds to the value of the pensions of the month in which they are paid or made available.
These dispatches came into force on 28 June 2022.
June 30, 2022:
Property Transfer Tax-New Rates
Following the amendments to the brackets for determining the IMT (Property Transfer Tax) rate introduced by the State Budget Law for 2022, Tax Circular 40119 divulges the new rates of property transfer tax applicable from June 28, 2022.
June 30, 2022:
Deferral of Tax Liabilities for the 2nd Semester of 2022
In order to mitigate the effects caused by the current conflict between Russia and Ukraine, Decree-Law 42/2022 provides for a complementary regime of deferral of tax obligations for the 2nd semester of 2022, regarding the withholding of PIT, CIT and VAT, also extending the subjective scope to all companies operating in Portugal.
Thus, during the 2nd semester of 2022, withholding PIT or CIT as well as VAT payments under the monthly or quarterly regime, may be fulfilled:
a) Until the deadline for the voluntary payment; or
b) In monthly installments, of an amount equal to or greater than €25, without interest or penalties, calculated according to the number of months remaining until the end of 2022.
June 29, 2022:
Brexit - Tax Representation
On 15 June 2022, Circular Letter No: 90056 was published, which determined the following:
- Deadline for tax representative designation or adherence to electronic notification channels
It may be carried out until 31 December 2022, without any penalty, the tax representative designation or, alternatively, the adherence to the electronic notifications and summons regime in the Portal das Finanças or to the electronic mailbox, by those registered in the Portuguese Tax Authority (AT) database and with an address in the United Kingdom, under the legal terms. However, this deadline is not applicable to the beginning of activity, nor to changes of address to the United Kingdom when there is a tax legal relationship in Portugal, being mandatory a tax representative designation or the adherence to one of the modalities of electronic notifications and summons.
Until 31 December 2022 the current address to the United Kingdom will be maintained for cases where no tax representative has been appointed or where there has not been adherence to one of the modalities for dematerialised notifications and summons.
It is not mandatory a tax representative designation or the adherence to the dematerialised notifications and summons regime by taxpayers who are not subject of a legal-tax relationship in Portugal, being considered as such, namely, those who do not own a vehicle and/or a property registered/situated in Portuguese territory; do not enter into an employment contract in Portuguese territory; or do not exercise a self-employed activity in Portuguese territory.
- Change of the tax address to the United Kingdom
1) By foreign citizens
Foreign citizens who wish to change their tax residence to the United Kingdom must communicate this change to the Portuguese Tax Authority and appoint a tax representative whenever the above mentioned conditions are not met.
2) By national citizens
National citizens who wish to change their tax domicile to the United Kingdom should make the change through the Citizen's Card services, of the Institute of Registration and Notary Affairs (IRN), and, immediately after the confirmation (fiabilization) of the address at the IRN services, appoint a tax representative at the Portuguese Tax Authority whenever the above mentioned conditions are not met.
- Applications for NIF attribution by taxable persons with UK tax addresses
The deadline of 31 December 2022 does not apply to new registrations, and the appointment of a tax representative at the time of registration is always optional.
