The tax system in Portugal is complex and there is no shortage of cowboy type tax advisors out there who mess things up.
A growing part of our practice deals with helping people get their affairs in order and tidy things up.
A sample subset of issues that we deal with includes:
- Tax residency by error - people who made themselves tax residents by error by using a Portuguese address of a friend/lawyer and never filed tax returns (thus potentially having criminal liability and missing NHR).
- Missed NHR deadline - people miss NHR deadline for various reasons, the leading one being a false belief that the eligibility is somehow dependent on various factors like the activity/profession.
- Aggressive structural changes post residency - Portugal is a party to EU-wide tax avoidance directives and certain changes to structure need to be reported to the authorities. Many advisors are unaware, putting clients in risks of hefty fines and audits.
- Classifying income to the wrong categories - classification of income is extremely complex for foreign income. Many foreigners file their tax returns with wrong classification, leading to either increased tax liabilities or potentially tax avoidance liability.
- Classifying income in the wrong tax year - Portugal accounting system often differs from other countries (the best example is the US), meaning that income that is declared in a certain country in a particular year may need to be declared in Portugal at a different year. This could mean large differences in tax liability.
- Trading without reporting - it is common for people to move to Portugal and continue to issue invoices to their clients.
- Paying in the wrong country as employees - it is common for people to continue to receive salary in another country after moving to Portugal in contrast to the double taxation treaty, causing potential double taxation (even when a tax treaty is in place).
This is just a sample.
We help solve problems, clear the history and people on the best path they can be.
If you believe that you may have had a problem, please send firstname.lastname@example.org a brief of what happened and we will let you know if we can help.