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IRS Tax Return 2015: frequently asked questions

IRS Tax Return 2015: frequently asked questions

The IRS delivery time has begun and will run until the end of May. There are several ways that you can use to deliver your personal income tax return, different dates that you need to know and various annexes that you need to fill, depending on your income streams. So it’s time to clarify some of the questions you may have concerning this important task.

In which form can I submit my IRS tax return in Portugal?

The submission of the IRS for 2015 can be done in paper at the local tax office, through post, or via the tax portal. However the most advisable way is to give this job to your accountant or tax adviser. He will make simulations before filling the forms, analyze and compare your tax return, before submitting it, making sure you are paying the legal minimum.

When do I need to submit my IRS tax return in Portugal?

In April for all those earning only pensions or salaries, from Portuguese source. In May for all the others cases.

Who needs to fill an IRS tax return in Portugal?

Only those that have earned salaries or pensions, from Portuguese source lower than 8.500€ per year, and when there wasn’t any tax deducted on source, may  be exempt and or in case the income is from a food pension and this was less than 4.104€. Please note that this only applies for individual declarations, if the option is for a joint tax return there are no exceptions.

Do I fill a joint return with my partner or a single one each?

This year you can chose to do it either way, so it’s important to ask your accountant to simulate the two scenarios and see what is more advantageous to you.

What happens if I forget to file a return or do it incorrectly?

It’s important to be aware that the fines for non-compliance with the dates, can be very high. Fines can go from 37.50€ to 112,50€ for a delay of 30 days. However depending on the type of miss conduct, mainly fraud, fines go from 375€ to 22.500€.

I’m non-resident, do I need to submit a return?

First of all, are you sure that you are non-resident? Do you have a fiscal representative? If not, where do you receive your IMI council tax bills? If you receive them at your property in Portugal, then most likely you are resident for tax purposes in Portugal. If you are non-resident, then you will only submit a IRS return in Portugal, if you have income from Portuguese source.

When do I need to pay my IRS?

After you submit your tax return the tax authorities will validate your declaration and you will receive a tax bill in the post, giving you 30 days to pay. Please note that if you intend to be away during the warmer months and don’t have a fiscal representative to receive your bills, you will incur in monthly interest charges and penalties, if paying out of date.

Some suggestions to make your IRS this year a stress-free task

We strongly advise our customers to prepare everything with time, in order to complete this process smoothly:

PASSWORD: Make sure you and your partner have a password to access the Tax Portal. If you do not have one, request a new one immediately;

COPY OF ID AND NIF: for you, your partner and any dependents you may have;

DECLARATIONS OF INCOME: gather the statements of income and withholding taxes;

BANK ACCOUNT:  your IBAN will be necessary to include on your IRS return and will make any tax refund much quicker.

CGT: if you have sold a property in 2015, make copies of the deeds (for purchase and for sale) and gather invoices for the real estate commission and home improvements. These can be deducted against any capital gain tax.

Remember if you have a resident status but your income was earned abroad, you have to deliver along with the tax return the ‘J’ Annex which discriminates the values received ​​abroad. There are taxation agreements in place between Portugal and several countries to avoid double taxation, so the impact this will have on your IRS will depend on several factors. If you are registered as a non-habitual resident, don’t forget you will need to fill in the Annex L.

And remember, we can assist you with all this bureaucracy, please feel free to book an appointment with us and avoid any late submission fines.