Tax Benefits for Real Estate Improvements - Urban Rehabilitation

The Article 45 of the EBF (Tax Benefits Statute) continues to provide access to tax exemptions on IMT (Municipal Tax on Transactions) and IMI (Property tax) in cases of Urban Rehabilitation, but there have been significant changes to its text in recent years, which have made its scope more restricted.

Its object is now limited to the verification of the following cumulative conditions:

• Intervention on an urban building or autonomous fraction with more than 30 years or located in urban rehabilitation areas;

• The property has been subject to a rehabilitation intervention promoted under the terms of the Legal Regime for Urban Rehabilitation;

• The conservation status is two levels above the pre-intervention state and has at least a good level under the terms of the applicable legislation - Decree-Law no. 266-B / 2012, of 12/31 and its amendments;

• The requirements for energy efficiency and thermal quality are complied under the terms of the applicable legislation, in particular the Decree-Law No. 118/2013, of 20/08, and its amendments.

Having fulfilled the requirements listed above, the main benefits granted are:

• Exemption from IMI for a period of 3 years, from the year of the completion of the rehabilitation works, which can be renewed, by request of the owner, for an additional 5 years in the case of properties leased or used for permanent housing;

• Exemption from IMT on the acquisition, provided that the acquirer starts the respective works within a maximum period of 3 years from the acquisition date;

• Exemption from IMT in the first transmission, subsequent to the rehabilitation intervention, when destined to lease for permanent housing or, when located in an urban rehabilitation area, also for own permanent housing;

The mentioned exemptions are granted after the collection of the respective taxes, so they are always given as a refund.

According to the most recent legislative amendment - Law no. 114/2017, of 12/29 - the recognition of the rehabilitation intervention must be requested with the previous communication or with the licensing request to the competent city council, being the responsibility of the city council (or if applicable, the managing entity of the urban rehabilitation) to communicate this recognition to the Tax Authority department of the area of the property.

This communication is made within a maximum period of 20 days from the date of the determination of the state of conservation resulting from the works, or from the issue of the respective energy certification, if later.

The effective refund of the taxes paid must be made by the Tax Authority services within a maximum period of 15 days from the communication referred to above.

Foreign Companies

Industries and activities that require VAT registration in Portugal

When carrying out trading activities in portuguese territory, foreign companies must be aware of their VAT registration and compliance obligations.

These are the most common ativities that require VAT registration in Portugal:

EVENT ORGANIZERS

Organizers of exhibitions, conferences, seminars and other events in Portuguese territory are required to be VAT registered, and file the VAT Returns periodically if it is a continuous activity, or a single VAT return in reference to the period of the event. Related costs are recoverable subject to the normal rules of deduction.

E-COMMERCE

Online sales to individuals or non-registered entities in Portugal will require the vendor to register for VAT, once the annual threshold of 35.000€ has been exceeded. The VAT on sales will then be charged at the portuguese rates, and the VAT Returns must be filed and paid periodically.

EXPORTERS - WAREHOUSE REGIME / CONSIGNMENT PROGRAMS

When exporters send their goods to Portugal to create a consignment stock to supply customers or goods subject to a Customs warehousing regime, they are required to be VAT registered. When the stock is kept by the clients, the sales may be processed through SBI (self billing invoice) by the client in a certified software, or alternatively, the company must have a certified software to issue the invoices. VAT Returns must be filed and paid periodically.

SUPPLY AND INSTALL CONTRACTORS

Contractors, who supply goods for which they are also responsible for the installation in portuguese territory, may be required to register for VAT. If the clients in Portugal are VAT registered entities, they will be able to declare the VAT on behalf of the foreign contractor, but if the clients are individuals or non-registered entities, the VAT registration is required, as the filing and payment of a VAT Return.

We provide the service to obtain the VAT Number in Portugal, with fiscal representation for non-EU companies, VAT registration, submission of the periodic VAT returns, VAT refund claims, certified billing software, certified accounting and tax advice for all types of operations in Portugal.

For further information on our services please contact info@intax.pt

Tax Id Number in Portugal (NIF) for foreign companies

To request the Tax Id Number (NIF or NIPC) of a foreign company in order to develop an activity in Portugal, or of a foreign entity with no activity in Portugal, the entity must be identified in the Central File of Legal Persons, upon issuance by the RNPC of a certificate containing the identification number, company name, nationality, and mention of the purpose of the isolated act or activity to be practiced in Portugal.

The following documents will be required:

• Application form - for registration / identification of legal entity or similar entity duly filled and signed by the person who represents the entity, lawyer or solicitor, except if the request is made in person in the RNPC by the company Director or by a person with legitimacy;
• Identification of the fiscal representative for tax purposes (natural or legal person, resident in Portugal), in accordance with the article 19, paragraph 6, of Decree-Law no. 398/98 of December 17, except in the case of entities established in a country of the European Union;
• Proof of the legal existence of the entity in the country of origin (duly updated if it is an entity subject to registration) within the validity period, issued by the competent services; and proof of the position or quality of the subscriber of the application, accompanied by the respective translation, made by a person entitled to do so, unless the documents are in English, French or Spanish; It is not accepted as proof of legal existence documents printed from the Internet, unless it is assigned legal value by national legislation.
• Copy of the identification document of the applicant;
• Payment in the amount of € 50 (cost of registration).

The company's NIPC request may also be made without the presence of the director or manager of the company, and may be requested directly by the tax representative or someone appointed for this purpose.

The company may also need a VAT registration in Portugal, depending on the activities to carry out in portuguese territory. You can read more about this here.

Any questions or additional information, send us a message to info@intax.pt or leave your comment.

Updated February 2020