Lands21

Need some help please regarding tax returns. Recently got advice and told we have to submit tax returns in Portugal from when we became resident. The only income we have are uk government pensions which are taxed at source. Can we submit the tax returns online without the need of an accountant each year, and if so, how do we go about doing this?? Thank You.

CamemBert

You are allowed to submit tax returns without using an accountant. If you don’t know how to do it. the simple solution is to pay an accountant the first time, and then look at what they did. There are English-speaking accountants. I paid 250 EUR this year for mine, will do it myself next year based on what they did.

Rambling archer

Lands21 - We found an accountant to do ours - actually in a solicitors office so check with them first rather than looking up "accountant" who tend to do big companies and aren't much interested in small fry. Ours cost 60 euros which we considered very good value. Your UK government pensions are a pain 'cos some PT officials get confused - they are to be taxed in UK at source (as you say) but need to be declared on the PT online declaration so they can decide which tax bracket you would come into if you have tax to pay in PT. You do not say if you are in the NHR scheme? This has to be declared online in the Finanças Portal (are you signed in there yet? - you each need a separate access and email). All you have to do if you qualify for the Non-Habitually Resident (but now Resident in PT), is fill in a box to say you want to be part of it and fill in the year of when you became resident (the 10 years cover tracks from that year).
Remember that any other "income" such as savings accounts, shares dividends, etc etc as well as your pensions, also have to be declared. A complicating factor is that the online declaration has a whole separate section to be filled in for those categories of incomes which come under the NHR, in addition to the overall declaration, so you have to be aware of all this and what to put where. Once someone else has done the first one (under your guidance) it becomes much clearer as to what goes where!

Word of warning - be sure that you get to check over and approve what the accountant/solicitor is going to put forward for your declaration before they post it, because once it has been sent off, it can be altered but is a pain to do and may flag up complications with the tax office.

Good luck! Also, there is a set programme for doing the tax declaration each year, and it has to be submitted before end June for the previous year's incomes. When did you become tax resident? If during 2020 then you are a bit late and there may be penalties for a late entry, but if in 2021 then you have plenty of time to get yourself sorted out ...

Alan PT

Portugal tax submission is relatively simple, certainly easier than the UK. I had someone do it and walk me through a couple of times and I think I'm almost confident to do it now. But I still find it easier to have someone who is native in the language and knows the process do the basics for me.

Unless you have a complex financial situation (which doesn't seem to be the case here), or you really want someone to "hand hold" and take all the thought away from you, then better avoid big firms and/or firms which cater primarily to foreigners, since they will charge you several hundred euro for the return

With a normal small Portuguese firm/individual practitioner you'd expect to pay <100 euro for a joint return for a couple, even if you have minor additional stuff like foreign (UK) bank accounts/interest or NHR

I second the point about checking the return though. Since you may have a page or two that isn't in the normal Portuguese flow it might get overlooked - our guy this time missed the UK bank interest (even though we sent it to him), only fixed it when I queried it. It's a tiny amount, but I always subscribe to the view that if I'm squeaky clean in declaring everything then I'm much less likely to have them decide to put me through the pain of an audit!

So, it all depends on how much involvement you want:
DIY - definitely possible, but you'll need to do a bit of research, setup and checking. This is a good place to start: https://www.doutorfinancas.pt/impost...o-irs-em-2021/
Portuguese practitioner - does most of the work, but it helps to be aware of things you should be declaring, since they won't necessarily think to ask you if you have a foreign bank account (for instance) and to do a basic check to see nothing was obviously missed
Big firm/foreigner specialist - does all the work for you, less likely to miss something, since you are more their normal flow, but you pay a fair bit more for it

Alan PT

One further point, the Portuguese submission window is relatively short (compared to the UK), so everyone gets very busy around that time. Try to be prepared in advance, if you decide to use someone then find them and talk with them in advance, be aware of what info you need. You don't want to be left scrambling to find someone in the middle of the submission time (it's possible, but stressful!)

toots sweet

Can I apply for NHR online from the UK or do I have to do it in PT? Got stuck here in UK longer than expected.

Alan PT

When did you declare residency? If in 2020 then I'm afraid you've already missed the window, it ended on March 31st. If in 2021 then you are fine, you have until March 31st 2022 to apply.

It used to require manual delivery of some docs, I used these people (provided by my company, but I don't think they are too expensive) to do the admin: https://www.newway.pt/en/

But Portugal is always improving and digitising and they did make the whole NHR submission process easier, so I wouldn't be surprised if you can just do it direct on the Financas portal now: https://www.portaldasfinancas.gov.pt/at/html/index.html This website seem to suggest that this is the case now: https://www.globalcitizensolutions.c...al-tax-regime/

You might still find it easier to pay someone to help a bit, to ensure you tick the right boxes and submit the right evidence. But it's not overly complicated, so don't let a high priced accountant spin a web of mystery over the whole thing and charge you hundreds for their "special government contacts"

Lands21

Thank you for all the very useful advice, it is much appreciated.

wellinever

I think its the date you started Tax residency that counts, as that can be different to when normal residency started.

Alan PT

I can see how it's possible to (perhaps inadvertently) become tax resident without applying for residency. But I didn't think the reverse was possible - once you are resident then you are automatically tax resident?

But it's not an area I looked at closely, so I'm happy to be corrected on that point

SgtTroy

I did our returns on my own, it was a bit of a headache, and I even managed to miss one of the Anexos with the donations, etc., but resubmitted it on the following day.

In my view it is not anything too complicated as long as you keep on top of it.

The worst part was the currency conversion from pounds to euros. For the UK interest alone, I had to search for ECB exchange rate for the day for a number of dates, all that for a gross annual interest of just less than £100...

ricko

I was forced to do my first return myself due to being caught in UK lockdown.
Though it was a bit of a struggle, with the help of this forum I managed to complete it.
As yours will be a simpler return than mine, I would recommend at least attempting it yourself when the tax season starts.
You could then fallback to the other suggestion of having a Portuguese helper for the first year, if necessary.
The link below should give you an idea of what is involved.

Basic tax return example