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print article021-E Fiscal Representation



One of the pillars of our services is representation.

What does this mean?

There are several forms of representation:

1. In an informal way clients could ask somebody to represent him/her in a certain case or event. This can be done by verbal or written request or even without the consent of the third party. Depending on the situation the other party dealing with it may or may not except my word. This form of representation is called in Portuguese “Gestão de Negócios”. Although maybe a lesser form of representation compared to somebody holding a full Power of Attorney issued in front of the Notary of Public, it also puts duties and rights on both parties and this subject has been dealt with in the Portuguese Civil Law Book in art. 464º and further. It also deals or indicates if and how remuneration is settled.

2. The most formal way of representation is by means of issuing a Power of Attorney (Procuração in Portuguese) in someone favour. This is a formal act celebrated in front of a Portuguese Notary of Public or can be done as well with Portuguese consulates abroad or even in front of  Notary in your own native language, after which these documents in order to have Power in Portugal has to be officially translated in Portuguese and recognized by a Portuguese Notary. All duties and rights related to this type of representation are dealt with in art. 263º of the Portuguese Civil Law. Sometimes these Power of Attorneys are made for a limited period, sometimes they are unlimited. In other cases it will have the Power to transfer to power to a third person. (Poderes de substabelecer)

In my case it could be that people want to give Power of Attorney to buy or sell on their behalf or deal with other matters. As the majority of the people do not speak the language it is quite common that you leave a Power of Attorney with somebody you trust and can converse with.

An other form of representation is fiscal representation.
In case somebody intends to purchase anything substantial in Portugal they need to obtain a fiscal or tax number (N.I.F. = Numero de Identificação Fiscal).
When you do this application you have to indicate an address in Portugal. As you normally do not have a property yet normally the address of a lawyer or agent is used. This will mean that all future correspondence will be forwarded to this address, for example your final tax card. In the beginning you will receive a copy of a document stating the application has been made.
In case you purchase a property in the future it will also mean that invoices for rates will be sent to that address.
It all depends on the relation you have with the person which address is used if he will forward it to you or he may even pay it on your behalf.
No doubt you will appreciate that lawyers may have hundreds of people have their fiscal address with them and it is impossible to keep track of that. For that reason it is your responsibility to officially change the fiscal address if you want to receive it yourself. As mentioned before it has to be a Portuguese address and not a post box number.

We have to make in this case a distinction between people being resident in Portugal or people who are not. If a resident obviously you can be traced.
If case of a non-resident the tax authorities will hold the person on who address the person is registered liable for any debt to the state.

Another form of representation is that of acting on behalf of an off-shore company.
As from January the first off-shore companies need to appoint a legal and fiscal representative in Portugal. He will be responsible for all t axes and obligations which are now laid down by law.
This means for example the submission of the yearly IRC (corporate tax) declarations, which for the first time will have to be done before May 2003 related<

134-E Fiscal Representation


You may have heard already that the Portuguese Government now has taken serious measurements to ensure that taxes like I.M.I. (Rates or council tax), Mais-Valía (Capital Gains Tax) and I.M.T. (Transfer tax or Stamp duty) are really paid and collected.

For the non Portuguese property owner, they have now enforced a law that stipulates that every non Portuguese individual or company purchasing, owning or selling a property in Portugal must appoint a Fiscal Representative and this appointment must be registered in the local Tax Department.


Each entity is now starting to insist on the application of the law and soon it will be impossible to do any purchase or sales transaction without the fiscal representative being known to the authorities.


The law insists that a fiscal representative must be a Portuguese national, holder of a Portuguese Residency Permit or a Portuguese company set up for this purpose. It is easy to understand that almost no Portuguese individual, friend, estate-agent, lawyer or solicitor is prepared to put his/her own assets at risk by acting as a Fiscal Representative for a third party foreigner he/she hardly knows.


The Fiscal Representative will receive all correspondence from the Finançes relating to tax on the property and property owner and takes on all responsibility on behalf of the registered property owner for all payments to the D.G.T. (Tax department) of Income tax (I.R.S.), stamp duty (I.M.T.), Corporation tax (I.R.C.), Capital Gains Tax (Mais Valía), Council Tax (I.M.I.), Presumed Rental Income Tax (I.R.S. or I.R.C.) and Value Added Tax (I.V.A).


The F.R. (Fiscal Representative) will be liable for submission of all annual Tax Returns and will be ultimate responsible for ensuring payment of any tax liabilities to the Portuguese authorities that pertain to the property and registered owners of the said property.




ReAct – Robert M.L. Snapper,  enables foreign property owners to comply with the legal requirements now being enforced by the Portuguese government.

The law has stated for many years that any individual owning property in Portugal who is not Portuguese or does not hold Portuguese Residency MUST appoint and register a Fiscal Representative in Portugal. Similarly any property owned in the name of a company (Offshore or Onshore) that is not registered in Portugal MUST appoint and register a Fiscal Representative in Portugal.

Previously the authorities had for the most part turned a “blind eye” to non compliance with the law. However since 2003 there has been a complete turn around in the government’s attitude towards this legislation and collection of taxes related to property ownership.

Starting with companies, the local Fiscal Authorities (Finanças) demanded to be made aware of the Fiscal Representative here in Portugal representing the property owning company. The next step was to be give concentration on properties owned in individual names. Failure to comply can ultimately lead to the sequestration or confiscation of the property concerned.

Most Tax Departments across the country are now demanding to know the name of the Fiscal Representative of the purchaser before allowing a sale to complete.

The Fiscal Representative is only permitted to be a Portuguese Company with statutes to perform this function or a Portuguese citizen or holder of a Portuguese Residency Permit.

The Fiscal Representaive is ultimately responsible on behalf of the property owning individual or company for the filing of the annual tax return (IRS or IRC) , payment of Council Tax (Contribução Autartica) and Capital Gains Tax (Mais Valia) in the event of sale of either the property or the shares of the company owning the property.

The management of ReAct have over 20 years direct experience in the Portuguese Real Estate market throughout the length and breadth of the country. ReAct complies with all the relevant legislation and carries extensive Professional Liability Insurance.

ReAct is happy to talk to individuals or companies interested in protecting their asset in Portugal and ensuring that this is not put in serious jeopardy by non compliance or ignorance of the laws of the land now being rigorously enforced.

The latest News:

ECJ finds Portugal's Fiscal Representative requirement violates EU rules

The European Court of Justice held, on 5 May 2011, that Portuguese provisions that oblige non-resident taxpayers who receive Portuguese-source income to appoint a Portuguese fiscal representative are in violation of the EC Treaty's free movement of capital rules, but not those required by the European Economic Area Agreement.

In European Commission v Portugal (C-267/09), the Commission asserted that the provisions under Article 130 of Portugal's personal income tax code constituted a restriction on the free movement of capital obligations under article 56 of the EC Treaty and article 40 of the EEA Agreement. It argued that the requirement was effectively a new charge on non-residents, who must pay representatives. Portugal argued that the provisions were necessary to ensure the effectiveness of fiscal supervision and the prevention of tax avoidance.

The ECJ held that the obligation to appoint a tax representative was an unjustified restriction on the free movement of capital in some circumstances but not in others. For taxpayers residing in other EU countries who receive Portuguese-source income requiring the submission of a tax return, the obligation to appoint a fiscal representative went beyond what was necessary to prevent tax evasion because the mutual assistance mechanism provided by Directive 77/799 was sufficient for achieving that objective. The Court found that, in such circumstances, the Portuguese provisions constituted an unjustified restriction of article 56 of the EC Treaty on the free movement of capital.

But for taxpayers residing in countries that are within the EEA but not the EU, the obligation to appoint a Portuguese fiscal representative was a justified restriction of article 40 of the EEA Agreement on the free movement of capital because the framework of cooperation between EU member states did not exist between member states and a non-member that had not entered into any undertaking of mutual assistance.

The Court found that the Commission had failed to establish that such agreements actually included sufficient mechanisms for the exchange of information to verify and monitor the returns submitted by taxable persons residing in those countries. It therefore held that, for taxpayers residing in countries that are a party to the EEA Agreement but are not a member of the EU, the obligation to appoint a fiscal representative did not go beyond what was necessary to achieve the objective of ensuring the effectiveness of fiscal supervision and preventing tax avoidance


Date Inserted: 01 November 2017
Last Updated: 10 January 2018
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