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The tax season is here: Portugal’s IRS 2021 deadlines

If you pay Personal Income Tax in Portugal, did you know you have to verify all of your invoices on the e-fatura website until next February 25th? Find out more about this and other IRS deadlines in Portugal for 2021…

Every year, personal income taxpayers in Portugal have to be aware of specific deadlines to secure possible tax deductions and avoid paying unnecessary fines that can be very high.

This includes anyone who is a tax resident in Portugal and needs to declare their worldwide income, as well as non-residents that earned income from a Portuguese source (depending on the income, there are some exceptions).

Below are some tips and information about submitting your Personal Income Tax return in Portugal in 2021.

1. Reporting changes regarding your family unit

You have until February 15th to inform the Portuguese Tax Authority of any changes to your household or other relevant personal information.

This must be done on your personal e-fatura web page, so it’s important to make sure you have a password.

However, you only have to do this if your family or personal situation has changed, namely if you have changed your marital status (marriage, divorce, or death of a spouse), permanent residence, your number of children, custody of your children, or if your children are no longer considered as dependents. If you do not update this information, the data provided in your last IRS statement will be taken into account.

2. Check your invoices on the e-fatura website

By February 25th you should also check all invoices for expenses on your personal e-fatura web page, as well as the expenses on your children's pages if that is the case.

If you are self-employed and covered by the simplified scheme, you must indicate whether the expenses are personal, professional, or mixed.

3. Check the deductions provided by the Portuguese Tax Authority

Until March 15th, your total expenses are shown on the e-fatura website, including deductible expenses made in entities exempted from issuing invoices. This includes the interest paid on mortgages, house rent, and public fees paid in health centres, hospitals and schools.

4. Submit a complaint regarding your amount of deductions

If you do not agree with the deductions provided by the Portuguese Tax Authority, you can submit a complaint between 15 and 31 March.

5. Choose an organisation to allocate 0.5% of your IRS

You can also transfer part of your IRS tax to a social, environmental or cultural organisation, as long as it is authorised by the Portuguese Tax Authority for this purpose.

The Portuguese Tax Authority allows taxpayers to voluntarily direct 0.5% of the tax that would be paid to the State for a cause of their choice, and at no cost to the taxpayer. That means that in a refund scenario you do not receive less, and in an additional tax scenario, you do not pay more either.

Until 31st March you can choose an organisation on the e-fatura website, under "Comunicar entidade a consignar IRS/IVA". This can also be done between April 1st and June 30th on your Automatic IRS online statement. In either case, it is necessary to indicate:

  • The type of entity you wish to support: IPSS (private institution of social solidarity), religious institution, public organisation (including environmental NGO’s), or cultural association;

  • The NIF (tax number) of the organisation;

  • And the type of deduction: in this case, ”IRS".

6. Submitting your Personal Income Tax return

Referring to income earned during the previous civil year, in 2021 Personal Income Tax returns in Portugal must be submitted between April 1st and June 30th, regardless of your income category.

If you comply with this legal deadline, by July 31st the Portuguese Tax Authority will process your settlement note and your tax refund, if applicable.

If you have to pay an additional tax to the State, you must do so by 31 August. This is if you have met the IRS deadline. Otherwise, you have until 31 December to make the payment.

The online process of submitting a Personal Income Tax Return in Portugal is relatively straightforward, with most of the information already completed automatically. However, the guidance of an experienced tax expert in Portugal will not only save you the hassle of possible language barriers (e.g., the e-fatura website is only available in Portuguese), but also ensure that you are complying with all fiscal obligations applicable and receiving the best tax advice possible.

If you have any questions, our team of experienced Chartered Accounts will be happy to help you! Please contact us for more information.

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