Tax calendar: dates you need to put in your diary for 2023
We wish all readers a healthy and happy 2023! Below you can find some of the dates that you need to put in your diary, concerning taxes in Portugal.
Please remember that before you submit your Personal Income Tax (IRS) you need to perform some tasks as per the new habits acquired in the previous years: tasks like validating or registering invoices at the tax portal, are now procedures that became part of the routine of any taxpayer. Your role is important in determining your IRS deductions, therefore check the tax calendar, to make sure you don’t lose any deductions or pay any fines.
If you have a business activity which was VAT exempt under article 53, but in 2022 you exceeded the VAT threshold, then you need to change your VAT status by the 31st of January. Likewise, if you were paying VAT but did not exceed the threshold in 2022 and wish to become exempt, the same deadline applies.
If you have a rental contract and are not obliged to issue monthly rental receipts, you have until the 31st of January to declare the yearly rental income for 2022.
For your info, the VAT threshold in 2022 was 12.500€ and this limit will increase in 2023 to 13.500€. The VAT threshold applies to your business income, irrespective of how many activities you may have.
Each taxpayer has until the 25th of February to query, report and verify invoices. To do this you should access the e-Factura portal and access your personal page, where you should verify if all your invoices have been properly communicated. If you find any failure or any invoice is not recorded, you can add these invoices to your file. It is also important to check in which category your invoices are recorded and move them into the appropriate section (ie health, education, etc) otherwise the deduction will not be accepted. These procedures need to be performed for each household expenditure holder, including dependents.
It is also important to update or register your household for tax purposes, before 15/02. Please note that this can be very important, not only for tax purposes but for other related matters, such as inscription at schools, kindergarten, etc and or other tax benefits you may be entitled to.
If you become a resident of Portugal in 2022 and want to apply for the Non-Habitual Residency scheme, you have until the end of March to submit your application at the tax portal.
During March, you also need to check your e-fatura page at the tax portal and if you feel the information is not correct, you can challenge the calculations made by the Tax Authorities. In other words, your tax deductions will be summarized here, under family general expenses, healthcare expenses, training and education expenses, charges with property for permanent residence, invoices VAT and costs with foster homes; if your total invoices are not consistent with the one totals shown in the portal, you have this two weeks window to contest it. Please note that it’s necessary to check this for each taxpayer.
You can submit your IRS (Personal Income Tax) declaration for 2022, from the 1st of April, until the end of June. This means that all declarations can be submitted during these three months, irrespective of your income category (employment income, pension income, self-employment income, rentals, etc.)
Please note that all residents, including Non-Habitual Residents, need to submit a tax return, even if they didn’t receive any income or don’t have any tax to pay. If the information on your foreign source income is not yet available before the 30th of June, you can file for an extension and submit the tax return later at no cost.
All non-residents that have income from Portuguese sources (ie property rentals, sale of a property, etc) also need to submit the tax return.
Payment of the first instalment of the IMI council tax. If in your case, the council tax is lower than 100€, this will be the only payment date you need to remember. If higher, please look for other instalment dates in August and November.
Do not forget to submit the IRS (Personal Income Tax) for 2022 by the end of June. Please remember that if you do not deliver your IRS on time, or if you fail to meet some of the deadlines above, you may lose some or all your tax deductions. Late delivery of your IRS may also cancel your IMI (Council Tax) exemption.
If you are entitled to a tax refund, the settlement must be made by the 31st of July. This is the deadline for the Tax Authorities to pay you.
If you have IRS tax to pay, you should make the payment no later than the last day of August, provided you have delivered the tax return within the time limits. If the tax return was submitted after the deadline, payment may be made until the 31st of December (fines and interest will apply).
The second instalment of the IMI council tax is due this month. This is applicable for all those where the yearly IMI payment is higher than 500€ per taxpayer.
If you have AIMI (additional council tax) to pay, this needs to be paid by the end of September. Remember that are liable for AIMI payment on all properties owned by companies. Individual owners are only exempt from AIMI, in the first 600 thousand Euros worth of property (based on the tax value and not on the commercial value).
Payment of the third and last instalment of the IMI council tax. This is applicable for all those where the yearly IMI payment is higher than 100€ per taxpayer.
Please remember that if you have a business activity, you are obliged to issue invoices up to five days after providing the service or receiving the funds. And all the monthly invoices need to be reported to the tax authorities (SAFT file) also by the 5th of each month, although 3 days are tolerant. Please be aware that the limit date used to be the 12th and the tax authorities will be more strict from 2023 and fines for late issuance of invoices or late submission of the monthly invoice file, will be applicable. This deadline also includes the invoices related to your rentals (AL).
Each month you also need to issue your monthly rental receipts in case you have a rental contract registered.
The car tax needs to be paid by the last day of the month when the car was registered. Please do not forget this as the fines are high in this case.
If you have a business activity, please remember that each quarter you need to submit a social security declaration, to ascertain how much social security you will pay each month in the following quarter.
If you have any questions, please feel free to contact us; tax planning is critical and you and your company, cannot afford surprises. Contact our office to discuss your situation and avoid any unnecessary fines.
What you need to know about crypto assets in Portugal and what changes from January 2023
The Portuguese Government introduced in the 2023 State Budget proposal the taxation of crypto assets (this exceeds the concept of cryptocurrencies), and short-term capital gains (up to one year) with cryptocurrency transactions will be taxed at 28%, but not all gains are liable to tax. Please find here what are the proposed changes for 2023 and how these may affect you.
Up until the end of 2023, what was the tax regime applicable to Crypto?
There was no tax regime and no specific law for cryptocurrencies until now, which made Portugal one of the most crypto-friendly countries.
Do I have to declare to the Portuguese tax authorities, that I own cryptocurrencies?
No, there is no wealth tax in Portugal, therefore you will only need to report income received from cryptocurrencies or gains made for the sale of these assets. The State Budget proposal now considers mining operations, as a business activity and the gains obtained with the sale of crypto are taxable at 28%, provided the crypto was bought less than a year ago.
I made a profit from selling cryptocurrencies I bought less than a year ago. Do I have to declare?
If the State Budget proposal for 2023 is approved, you will have to report the sale operations when submitting your Personal Income Tax and the gain obtained (difference between the market value at the date of sale and the acquisition value, net of necessary expenses and effectively carried out, inherent to acquisition and disposal) will be liable to tax.
How and when do I have to declare?
The tax year in Portugal is from January 1st to December 31st and the tax submission is normally available between April 1st and June 30th. When submitting the tax return – to be done mandatory online – you will have to include the crypto assets sales operations you had in the previous tax year.
How much tax will I pay for the gains I made from selling cryptocurrencies?
If you held the cryptocurrencies for a period of fewer than 365 days, and if you made capital gains, you will be subject to a tax rate of 28%. If you aggregate this income with your others source of income, you will be taxed at the progressive tax rates and the tax rate will be the one corresponding to your income bracket.
Can I be punished if I don’t submit the tax return or do not include this information on my tax return?
Yes, failure to report income and or earnings or failure to submit the tax return constitutes an administrative offence, subject to penalties. The amounts of the fine depend on the specific situation. If there is a voluntary regularization, the waiver or reduction of fines may apply, depending, among other factors, on the date on which the fault committed is regularized, as well as whether or not a report was raised, a report or complaint was received or initiated tax inspection procedure.
Compensatory interest (at an annual rate of 4%) will also be payable on the missing tax.
How do the tax authorities know about my crypto assets?
In the proposed state budget, there is now a reporting obligation by intermediaries. Thus anyone who provides custody and administration services of crypto-assets on behalf of third parties or manages one or more crypto-assets trading platforms must notify the Portuguese Tax Authorities, up to at the end of January of each year, for each taxable person, through an official model, the operations carried out with their intervention, concerning crypto assets.
What can I offset against my gains on the sale of crypto?
In the case of the sale of crypto assets, the gain liable to tax is made “by the difference between the sale value and the acquisition value”, net of the necessary and effectively incurred expenses, related to the acquisition and disposal. For this purpose, the sale value corresponds to the market value of the crypto assets at the date of sale.
What happens to cryptocurrencies I bought more than a year ago?
Capital gains related to cryptocurrencies held for a period equal to or greater than 365 days will be exempt from tax.
I have two units of the same cryptocurrency purchased at different times: one more than a year ago and the other less than a year ago. I made a profit by selling one of them, but I don’t know which one. Do I have to declare profit?
The PIT Code provides for the application of the FIFO method (First In, First Out) in the calculation of capital gains obtained from the sale of securities, according to which the securities sold are those acquired the longest. This rule has not undergone any change in the proposed State Budget for 2023, to ensure its application to the calculation of gains obtained from the sale of crypto-assets that do not constitute securities.
The value of my cryptocurrency portfolio increased last year, but I haven’t made any transactions. Do I have to declare it?
If you did not carry out any transaction in the previous year, it means that you did not have any capital gains from the sale of cryptocurrencies, so you will have nothing to declare to the Tax Authorities since the PIT one taxes realized gains.
I do mining of cryptocurrencies. Do I have to declare it? Is this a gain or a business activity income?
Cryptocurrency mining is now considered a commercial/industrial activity covered by the IRS under category B (self-employment). The income obtained from the exercise of this activity will be liable to the IRS, and the taxable income will be taxed at progressive tax rates.
The rule contained in the State Budget proposal for 2023 is not clear concerning the coefficient to be applied under the simplified regime, but it seems to imply that the taxable gain will correspond to 15% of the income obtained from the activity.
I received cryptocurrencies from a friend. Do I have to declare too?
In the case of a free transmission (for example, a donation of cryptocurrencies) there is a 10% Stamp Duty fee. This is not an income, so it won’t be reported in the tax return, only when it is sold.
I received cryptocurrencies as part of my salary, how is this taxed?
The cash equivalence of income in kind will now apply in situations where the income takes the form of a crypto asset. This means that in case the crypto is received as a payment, then it will be taxed under the income category rules (salary if it refers to salary, business income if it refers to business, etc). These assets will only be liable for capital gain tax if they are sold within less than a year and if there is a gain.
In case I use crypto assets to buy a house, how does the IMT apply?
The value of the crypto-assets given in exchange (determined under the Stamp Duty Code) must be considered for the purposes of calculating the deed value and therefore the IMT – Property Transfer Tax, will be based on this value.
My income comes from my activity of buying and selling cryptocurrencies. How do I declare?
If this is a repeated and continued practice, then you need to report this to the tax authorities and register your business activity, declaring the income as a sole trader.
Can I offset losses?
If you made losses the negative balance calculated in each year, related to the sale of crypto assets, can be carried forward for the following five years, if you opt for the inclusion of this income in category G and chose to aggregate this income to your other income, in order to be taxed at the progressive tax rates.
Do Crypto Assest Pay Stamp Duty?
The State Budget for 2023 proposes to tax “free transmission of crypto assets, when they are deposited in institutions in Portugal or, if they are not deposited, if the author is domiciled in Portugal, in the case of inheritance by death, or if the beneficiary is domiciled in Portugal, in the case of another free transmission”. Stamp Duty will be applicable at a rate of 10%, of free transmission of crypto-assets, understanding as crypto-assets any digital representation of value or rights that can be transferred or stored electronically, using distributed ledger or similar technology.
What are the rules for determining the taxable value of a crypto asset for Stamp Duty purposes?
It is expected that the valuation will be determined under the official quotation value if any and this will be the value declared by the inheritor/beneficiary.
How are legacy crypto assets taxed?
As the stamp duty will only apply to crypto assets in Portugal, there is a tax on inheritances by death when the author of the transfer is resident in the country. In the case of donations, it applies if the beneficiary is also domiciled in the national territory. In both cases, the rate will be 10%. As is what happens currently with shares or securities the withdrawal of crypto-assets that have been subjected to a free transmission cannot be authorized, without the respective Stamp Duty having been paid.
When are crypto assets considered to be located in the national territory?
In what concerns to residency rules, the State Budget 2023 determines that crypto-assets deposited in institutions with headquarters, effective management or permanent establishment in the national territory are considered situated in Portugal, or, in the case of non-deposited crypto-assets, in successions upon death, when the author of the transmission is domiciled in national territory; in other free transmissions, when the beneficiary is domiciled in the national territory.
Do commissions charged for providing cryptocurrency services (so-called intermediaries) pay stamp duty?
The State Budget for 2023 includes the taxation of Stamp Duty, at 4%, in commissions and fees charged by or with the intermediation of crypto-asset service providers. This means that CASPs (Crypto Asset Services Providers) will have to pay stamp duty at a rate of 4% on the transactions they intermediate and on the commissions they charge.
This means that CASPs domiciled in Portugal to will have to settle this tax. If the commissions are charged by service providers not domiciled in Portugal, this responsibility will fall on CASPs domiciled in the national territory that has intermediated the operations and on fiscal representatives who are mandatorily appointed in Portugal, if the operations have not had any intermediation in Portugal.
I bought NFT (non fungible token). Do these rules also apply?
Yes, an NFT is included in the definition of cryptocurrency provided in the IRS code.
Do I also declare income with stacking (crypto interest)?
The proposed State Budget for 2023 did not establish any specific rule for this income, therefore this income will only be taxed if it results from business and professional income (taxed under category B – sole traders).
A brief overview of the asset in each country, type of taxation, and the applicable tax rate if, applicable.
|Country||Classification||Type of tax||Tax rate|
|Australia||Property||Progessive income taxGST||19-45%10%|
|Brazil||Asset||Capital gains tax||15%|
|Canada||Asset||Progressive income tax||15-33%|
|China||Virtual commodity||Progressive income tax (for international trading)||3-45%|
|France||Property||Capital gains tax||30-34%|
|Germany||Private money||Progressive income tax||0-45%|
|India||Digital asset||Progressive income taxGST||0-30%18%|
|Israel||Digital asset||Progressive income taxVAT||10-50%17%|
|Japan||Property||Progressive income taxConsumption tax||5-45%8%|
|Russia||Digital asset||Income tax||13%|
|South Africa||Intangible asset||Progressive income tax||18-45%|
|South Korea||Property||Income taxVAT||20.9%7%|
|Sweden||Digital asset||Progressive income tax||0-57%|
|Switzerland||Movable property||Progressive wealth taxProgressive income tax||0-0.67%7-34%|
|Turkey||Commodity||Progressive income tax||15-35%|
|UK||Private money or Asset||Corporation taxProgressive income tax||19%0-45%|
|USa||Property||Capital gainsProgressive income tax||0-20%10-37%|
Anti-inflation measures and how this will affect rentals in 2023
The Portuguese Government has launched an anti-inflation package and new rules will apply to the taxation of long-term rentals in 2023, as compensation for the limited established annual rent increases.
How much was the inflation in Portugal in September?
The Portuguese Statistics Institute (INE) has stated that the inflation in September 2022 will be 9.3%. This is an increase of 0.4% compared with August 2022 and is the highest inflation rate since October 1992. In the Eurozone, the average inflation is currently 10%.
How much and when are the house rents updated?
As a rule, rents are updated annually, although there are cases in which this increase may not occur. It happens, for example, if there is an agreement between the tenant and the owner, which determines that there is no room for an increase. Even so, for leases after 1990, the most common is that this update is made every year and reflects the income update coefficient, whose value is defined by the Government based on the value of inflation. This coefficient is normally published in October each year.
What is the coefficient for 2023?
If the government would consider the inflation rate as of August 2022, like normally happens, the annual increase would be 5.43%. However, the Portuguese Government has established a limit of 2%, as a way of fighting inflation. This increase is applicable for both types of contracts: habitation and commercial.
How and when does the rent increase comes into effect?
If the rental contract allows for yearly rental updates, the landlord must inform the tenant by registered letter of the intention to increase the rent. This should be done after the publication of the law, which normally occurs each year in October and needs to be done with a minimum of 30 days’ notice. The new rent should start in January.
The first rent update should only be done after 1 year of the contract.
The Government will create a tax relief, to compensate landlords for the low rent increase.
The Portuguese Government has informed that will publish a law to compensate the landlords. This compensation is only valid for contracts before 01-01-2022 and it means that for individual taxpayers, who normally are taxed at the rate of 28%, the taxable rental income will be 91%, instead of 100%.
This means that if you have a net rental income of 10.000€ in 2022 and the tax is 28%, this equates to 2.800€. The same rental income in 2023, will generate a tax bill of 2.548€. As this will only be effective in 2023, the tax is only submitted and paid in 2024.
Please note that this applies to long-term rental contracts (category F) and not to touristic lettings which are service and reported under category B.
What about the rental income received by companies?
This law will also benefit companies and in this case, the coefficient to calculate the tax will be 0.87.
How can landlords save tax on rental income?
If you are a landlord with rental income from category F, please be aware that the longer the contract, the lower the tax rate applicable to your net income and this is not new. What is new is that the government will include in this law reductions to the taxable income and these reductions will increase with the length of the contract, as per the image below:
|Term of the contract||Tax Rate||Taxable income|
|Up tp 2 years||28%||91%|
|From 2 to 5 years||26%||90%|
|From 5 to 10 years||23%||89%|
|From 10 to 20 years||14%||79%|
|More than 20 years||10%||70%|
This law that was proposed by the government will also include these new coefficients for contract renewals. For instance, a contract of 2 years when it’s renewed, will benefit from the tax at 24% and only 89% of the net rental income will be taxed.
Please feel free to send any tax questions you may have to email@example.com.