BREXIT - Changes in accounting and tax procedures in 2021

After the end of the transition period ending on 31 December 2020, the United Kingdom is no longer a member of the European Union, which implies changes in some accounting and tax procedures in the relationship between British citizens and Portugal. Amongst the various changes, of note is the need for British citizens to appoint a tax representative in Portugal.

Under what circumstances do British citizens have to appoint a tax representative in Portugal?

Individual and corporate taxpayers that are registered with the Portuguese Tax Authority and have their tax residency in the United Kingdom must appoint a tax representative, namely for IRS (Personal Income Tax) or IRC (Corporate Tax) purposes.

The appointment of a tax representative in Portugal must be done within six months after 1 January 2021, to avoid penalties.

During this six-month deadline, current addresses will be maintained to the UK, for cases where no tax representative has been appointed.

Regarding new registrations with the Portuguese Tax Authority, the start of new business activities, as well as changes of address to the United Kingdom, the aforementioned six-month period does not apply, and a tax representative must be appointed immediately.

Find out more about tax representation in Portugal in this blog.

If you have any questions or would like to know more about investing or moving to Portugal after Brexit 2021, please contact us. Our team of experienced Chartered Accounts will be happy to schedule a meeting or Zoom call with you!