The appointment of a tax representative in Portugal always raises some questions regarding their obligation and responsibility, as well as the need for their appointment.

So, who is required to have a Tax Representative?

The appointment of a Tax Representative for VAT and IRS (Income Tax), is mandatory when a non-resident taxpayer carries out activities in Portugal on an independent basis, such as in the case of local accommodation activities.

The appointment of a Tax Representative can be done by any non-resident, even if not required. The Tax Representative plays an important role in the relationship with the Tax Authority.

But then, what is the responsibility of the Tax Representative?

The Tax Representative has two levels of responsibility in terms of declarations and taxes: Income Tax (IRS) and Value Added Tax (VAT).

The first level of responsibility applies to all non-resident taxpayers and involves the obligation to declare income in Portugal, such as income obtained from real estate. Note that when a non-resident sells their property in Portugal, there is an obligation to declare the sale, even if there was a loss and consequently a capital loss.

The non-declaration of this sale is the responsibility of the taxpayer and subsidiarily of the Tax Representative, who may be fined for not fulfilling the declaration.

In a second level, when a non-resident engages in independent activities in Portugal, the Tax Representative combines the aforementioned declarative responsibility with the responsibility of ensuring tax compliance on behalf of the taxpayer, thereby ensuring the payment of their taxes.

However, the role of the Tax Representative has an underlying duality that involves both ensuring compliance with obligations arising from Portuguese tax legislation and providing advisory services to the non-resident.

Tax advisory services to a non-resident promote their fiscal well-being, ensuring that they are aware of their tax responsibilities and rights vis-à-vis the Tax and Customs Authority.

The constantly changing context makes the work and responsibility of the Tax Representative complex, resulting in added value for the non-resident.

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