Exemption from the appointment of a tax representative for individuals who are tax residents in third countries without professional activity in Portugal

The Decree-law 44/2022 of 8 July, based on the background of the impact of technological developments that have been felt in recent years, namely in the means of communication, amended the general tax law in Portugal in order to exempt the obligation to appoint a tax representative whenever taxable persons adhere to any of the dematerialized notification channels.

This appointment of the tax representative, who must be domiciled in Portugal, is therefore no longer mandatory for individuals without a professional activity in Portugal who reside for tax purposes in a third country but who have some link with Portugal to justify the need to have a tax identification number (NIF).

The tax representative ensures the represented (non-resident citizen) some acts, such as:

Receipt of correspondence sent by the tax administration, as the represented person considers himself domiciled at the representative's address:
Compliance with all accessory tax duties, including the delivery of income statements;
Exercise your rights with the tax administration, including those of complaint, appeal or challenge.

The tax representative is not responsible for paying the taxes of the non-resident citizen, with the exception if they are responsible for the payment of the Value Added Tax (VAT), if the non-resident citizen carries out a self-employed activity subject to VAT, insofar as there is joint tax liability on the part of the tax representative of the non-resident taxable person.

The lack of designation of a tax representative, when mandatory, as well as the designation that omits the express acceptance by the representative, is punishable by a fine of € 75.00 to € 7,500.00, leaving the non-resident citizen unable to exercise rights with the tax administration, including complaints, appeals or challenges.

In this sense, it makes it possible for taxpayers obliged to appoint a tax representation to, alternatively, limit themselves to adhering to a dematerialized notification channel, be it the public electronic notification service associated with the single digital address (MUD), the notification regime and electronic citations on the Tax Portal or the electronic mailbox

This change took effect on July 9, 2022, and as of January 1, 2023, the obligation to subscribe to the electronic mailbox will be waived for all taxable persons who subscribe to the associated public service of electronic notifications to the MUD or to the system of electronic notifications and citations on the Tax Portal.

Thus, in Portugal, there is no obligation to designate a tax representative for taxable persons residing abroad (outside EU) or who are absent from national territory for more than six months, with due adhesion to the public service of electronic notifications associated with the single digital address, the system of electronic notifications and summons on the Tax Portal or the electronic mailbox, with the exception of the provisions regarding legal persons or other legally equivalent entities that cease their activity.

This obligation remains for taxpayers of the Corporate Income Tax and for the taxpayers of the Personal Income Tax who carry out self-employed activities in Portuguese territory, maintaining the obligation to appoint a VAT tax representative (will have to be a VAT taxable person residing in national territory).

The deadline for complying with the obligation to appoint a tax representative or to join one of the dematerialized notification channels is 15 days from the triggering event of the tax legal relationship.

Camila Rison Sousa
camila.riso@bdo.pt