Liability to Submit Tax Returns by Expatriates

It is a common misconception by expatriates that, if withholding taxes have been deducted from their pension income at source (or they are submitting tax returns in the home country)
(see non habitual residence scheme), they are not subject to Portuguese tax. This is not the case – residents are subject to tax on their world wide income and this includes expatriates and retirees.

Benefit of Prompt Completion of Tax Formalities

Effectively, if expatriates do not take the appropriate steps to “de-list” from their home country and properly register and submit their tax returns in Portugal, they could be in the unhappy situation that in a future audit, they would be liable for Portuguese taxes without being able to claim for some deductions and credits because they were not claimed in the correct year.

Portuguese Tax Authorities do not send out tax forms

It is a further common misunderstanding that if the tax authorities do not send out tax forms to be completed that there are no tax obligations incurred. In Portugal the tax authorities do not send out tax forms to be completed.

In Portugal, it is up to the tax payer to declare his income and submit on the appropriate tax returns annually.

Electronic Submission of Tax Returns

For tax payers submitting returns electronically (internet), those earning income from pensions and/or employment, returns should be submitted during the month of April. Should the tax payer have earnings from other sources, tax returns should be submitted during the month of May.

Should returns not be submitted timeously the taxpayer will be subject to penalties.