Re: Unexpected tax document
 

https://info.portaldasfinancas.gov.p...ges/irs78.aspx

And, further to that - 78A-78F.

Re: Unexpected tax document
 

Is this the simplified version??? LOL

Re: Unexpected tax document
 

It is the simplified version, but there are too many ifs and buts for anybody to give a general overview. The short answer 'it depends'

Re: Unexpected tax document
 

I think this probably lays it all out in a more readable fashion :

IRS - Deductions, benefits and rates 2020

Re: Unexpected tax document
 

Thanks for all your comments.
SgtTroy, we pointed out to the taxman the part in the big book they have in finanças which does indeed state that you have to declare worldwide income and he said yes but for overseas property that only applies to those countries that don't have a double taxation agreement. I also asked if we sold a UK property would we have to declare CGT paid in the UK and he said no.
TonyJ1, you say the taxman is incorrect so what would you do in this circumstance - would you re-submit the return without the rental income as he suggested? (he even offered to help us do this if we had problems)

Re: Unexpected tax document
 

I'd rather require from AT a response in writing. Not necessarily from the same person, but preferably from the dedicated department.
Ideally with an innocent, but very specific letter.

Once you have their official response, even after some exchane of correspondence to narrow down the issues you should be sorted.

​​​​​​Ot herwise there is always the risk of being told something which may later prove to be incorrect, and having no other defence but your recollection of the conversation, which the other party may subsequently deny for whatever reason.

I fondly remember how well over a decade ago I approached HMRC online with a relatively non-trivial question regarding double taxation (at the time that option still existed).
A week later I got on my email a detailed response of five pages, which left no question unanswered.
Different times, different places though...

Re: Unexpected tax document
 

Though I disagree with the taxman, I would not substitute the tax return - at this stage you are late, and if at some stage, should they require you to resubmit the tax return, the consequences would be the same. I suggest you keep notes etc if a penalty notice is raised - it would not be a defence, but if the understanding at the local tax office was defective, they would more than likely 'forgive' the fine - the office would have the authority to do so. The fine in any event will not be excessive.

As to understanding of the law, I suggest that the taxman, specially in respect of the capital gains and rental income, that he should read the tax ruling 4217/17 published in the web site by the tax authority (and it was for the UK - this was a result of a request I made to the tax authority due to the values involved and the client wanted certainty) - it is explicit that it should be declared. In respect of rental income. There are probably some other rulings around this issue - but this is a direct answer to the issue raised.

Re: Unexpected tax document
 

TonyJ1 - Thanks for responding - I was very interested in what you wrote, especially about the tax ruling but unfortunately I can't find it on finanças site. Please - it would be great if you could supply more detail on how to find it or even better a link - Thanks again.

SgtTroy - Thanks for your input too - Yes we know it's always better to have such things in writing but in our experience it's almost impossible to get people to commit themselves like that and in this case I don't know who to write to who is higher up than the man we spoke to.

Re: Unexpected tax document
 

I had a similar ruling from a tax authority (not in Portugal) and got it in writing too.
A very precious document, it came by fax (this was some years ago).
A few years later, the thermal paper was blank!!
Scanning and photoshop brought it magically back to life.

Re: Unexpected tax document
 

I started scanning all paper documents few years ago and now almost everything exists only in digital form somewhere in the clouds 👌

Re: Unexpected tax document
 

https://info.portaldasfinancas.gov.p.../PIV_13094.pdf

https://info.portaldasfinancas.gov.p.../PIV_12895.pdf

Re: Unexpected tax document
 

Thanks a load TonyJ1 for sending those links.
Google translated 4217/17 for me and states:" In view of the provisions of paragraph 7 of the aforementioned legal provision, this tax-exempt income must be included for the purposes of determining the rate to be applied to other income subject to IRS." That's clear enough but implies that when tax-exempt income is included it is only to use the appropriate tax rate and not to actually tax the exempt income.
The other issue that this is specifically for non habitual residents which we are not, although I can see there's a case for the rule being less generous for permanent residents.
When I have more time and enthusiasm I'll tackle the appropriate articles mentioned. Thanks again

Re: Unexpected tax document
 

https://info.portaldasfinancas.gov.p...ages/irs1.aspx - see nº2

to eliminate taxes paid abroad
https://info.portaldasfinancas.gov.p...ges/irs81.aspx - see nº 1, 2, 3