There are three main numbers required in Portugal:
- Número de identificação Fiscal (NIF) – tax number
- Número de Identificação de Segurança Social (NISS): Social Security Number
- Número de Utente de SNS (National Social Security Number)
The first and most important is the tax number.
Each taxpayer receives a unique nine-digit number – NIF.
This is analogous to TIN in Ukraine, but in Portugal NIF is used in everyday life much more often.
Even those who do not plan to move and pay taxes in Portugal need a tax number.
Why get a tax number:
Obtaining a taxpayer number is the first and mandatory step in any interaction with the Portuguese state.
NIF is presented when:
- buying or renting real estate in Portugal;
- registering a business;
- opening an account in a Portuguese bank;
- making an appointment with a doctor at a local hospital;
- connection to the Internet and mobile communications;
- applying to public authorities;
- paying for purchases.
A taxpayer number may even be requested when making a purchase in a local supermarket or hair salon.
The NIF is indicated on the receipt, and information about the expenditure is sent to the Portuguese tax office.
If the NIF holder pays taxes in Portugal, they declare their income and expenses. At the end of the fiscal year, he or she may receive a refund of a portion of the income tax paid if the taxpayer used the NIF when making payments.
The calculation is made by the IRS. It uses a formula that takes into account the number of dependents of the taxpayer, the amount of salary and the number of sources of income. On average, the state refunds up to 10% of the amount of income tax paid.
If the taxpayer’s salary is 1000 euros per month, and he indicates a NIF for each payment and transaction, at the end of the year he will receive about 700 euros of the tax deduction.
Who can get a NIF?
Most countries only issue a tax number to foreigners who reside in the territory of the chosen state for more than 183 days per year.
Portugal allows you to register a NIF without changing your tax residency.
Anyone can obtain a tax number, for example, a buyer of real estate in the country.
Citizens and residents of Portugal receive a tax number when they apply in person at a tax office. In the application form they indicate the address of residence in Portugal.
Citizens and residents of the European Union can also obtain a NIF on their own, but they will have to come to Portugal to do so.
In the application form, they can indicate their domicile address in an EU country.
Citizens and residents of non-European Union countries receive NIF through a tax representative in Portugal. In this case, the application must state the Portuguese address of registration of the tax representative.
The tax representative can be a lawyer or a law firm.
The representative takes responsibility for dealing with the Portuguese tax authorities. For example, receives notices from the tax office and makes sure that the NIF owner pays taxes on time.
The services of a tax representative cost on average around 1000 euros per year.
It is mandatory to have a tax representative as long as the foreigner is registered as a Portuguese taxpayer. If the NIF holder moves to Portugal and decides to pay his or her own taxes, he or she can terminate the contract with the representative. In this case, the taxpayer needs to make an appointment at the tax office and change his address to his place of registration in Portugal.
Documents to be submitted for NIF registration:
- proof of identity – passport or ID card;
- proof of residence in Portugal, such as a utility bill;
- a document with a tax number in the country of citizenship;
- a certificate from the place of work indicating the position and salary
(the tax representative also shows a power of attorney signed by the applicant).
How much does it cost to register a NIF?
Citizens of Portugal and other EU countries receive a number for free.
If a non-EU citizen applies for NIF registration, he/she pays a fee of 10 euros.
How do I start paying taxes in Portugal?
The applicant is entered in the taxpayer register. A personal account on the website of the Tax Service appears as proof of registration of the taxpayer.
The tax office issues a certificate confirming NIF registration.
A NIF holder does not pay taxes in Portugal unless he/she lives in the country permanently. To stay in the country for more than 183 days per year and to change tax residency you need a Portuguese residence permit.
You can get a residence permit in Portugal in different ways: get a job in a local company, go to university or get married to a Portuguese citizen. You can also get it by investing in the Portuguese economy. 90% of investors buy real estate in Portugal in order to obtain a residence permit.
The program offers two options with the purchase of real estate:
- a deal worth 500000 euros or more on the purchase of any property;
- a deal worth 350000 euros or more when buying a property over 30 years old under renovation.
Investors can also open a deposit in a local bank, invest in Portuguese businesses and create jobs, finance cultural and scientific projects.