Thurian

Hi all,
It's been nearly 5 years since I've posted here but could do with some advice!
I've changed to a Portuguese accountant for for my rental income and they insist that I'm liable for 25% tax on my GROSS rental income from my apartment with no allowable deductions for utilities, repairs, maintainance, cleaning etc.
this seems absolutely ludicrous to me and turns a small profit into a large loss.
Gut tells me this CANNOT be right.
Can anybody enlighten me???
Thanks in advance.

quiltman

Hi Thurian, This seems to contradict what your accountant says: http://www.globalpropertyguide.com/E...axes-and-Costs

Hope it's correct!

RichardHenshall

The link above isn't correct as it's years out-of-date.

Is this 'long-term' rental income declared on Anexo F or 'short-term' holiday rentals (Alojamento Local) declared under the simplified regime category B on Anexo B? Have you registered a business activity in Portugal with the Finanças?

Thurian

Thanks for that!
I definitely felt something wasn't right.

TaviraTrog

I notice that your PT property is in Cabanas. You might like to try JST in Cacela to do your accounts. They are very good and reasonably priced.

Thurian

Cheers.
I think I'll need to change alright!
Current accountant seems a bit clueless.

RichardHenshall

You didn't answer my questions in post #3. Your situation could have a huge bearing on the rate of tax you have to pay.

Thurian

Sorry Richard, I didn't see your post.
It's all short term rental.
I am registered with Revenue but don't know as what!
My accountant speaks no English and I speak no Portuguese.
I don't live in Portugal so everything goes through a third party.

RichardHenshall

I suspect you would know if you had applied for an AL licence and registered a business activity at the Finanças (which is a necessary step, which I think you would have done in person). Do you invoice your guests directly or is it all done by a management company? Do you get a fixed rental for the season?

If you are properly set up as an AL business activity you would pay tax on 35% of your turnover but I suspect you're possibly not and are therefore unable to take advantage of the more favourable tax rates, as it's not you but your management company who is running the business activity. The expenses you incur with short term rentals (cleaning, utilities etc) cannot be claimed as they don't really exist as such for long term property income, which is the tax regime you may be in.

Alternatively, you may have misunderstood your accountant's communications or someone may have failed to tick a vital box on your Portuguese tax return - omission results in tax at 25% of turnover rather than 25% of 35% of turnover. Can you get a copy of your tax return and/or the tax computation from the Portal das Finanças to check?

Thurian

Thanks Richard.
I don't use a management company.
25% on turnover is effing outrageous if that's what I'm meant to be paying.
Completely pointless having the touristic licence (which I've had in place since its introduction) and being legitimately registered to operate.
I'll be selling up if that's the case.

RichardHenshall

Did you update your AL licence in 2014/5 and register the commencement of your business activity when the rules changed?

Thurian

I wasn't even aware the rules HAD changed.

RichardHenshall

Since so many organisations see the provision of services to ensure compliance with the current Alojamento Local rules as an opportunity to charge a hefty fee, it can be difficult to find one single source of reliable and current information that is free, in English and online.

You will need to do some searching and reading.

Jonny22

If I'm allowed, following link may be useful. If not allowed I'm sure Rosemary will delete it. Just a bit of info.

questions

Jonny22

Sorry, link

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