Personal Income Tax – Late Tax Return Submission
Diogo Pedro | Lawyer
If you are concerned about having missed the deadline to file your Portuguese personal income tax return, rest assured that although penalties may apply, you can still file a late tax return to fulfill your obligation of reporting your worldwide income. As it is commonly acknowledged, the income received by individuals is taxed under the Portuguese Personal Income Tax Code.
Personal income tax returns should be filed and submitted between April 1st and June 30th in regard to the previous tax year. However, even if you missed this deadline, you should file a late tax return. This obligation does not disappear after the deadline has passed. The fastest and most efficient method to file a tax return is online through the Portal das Finanças. To do this, taxpayers must create an account or log in to the Portal das Finanças and obtain an access password.
Filing your tax return late is preferable to not filing at all, as it ensures you comply with tax regulations and may help mitigate potential penalties. Eventual penalties depend on the evaluation made by the Tax Authority regarding the damage caused by the taxpayer to the Portuguese state. The exact penalty amount is uncertain because it is directly influenced by the extent of the harm caused to the Tax Authority (AT).
If the Tax Authority (AT) determines that no harm was caused to the Portuguese state, you will not be notified of any penalty and will have no penalty to pay. If your delay in submitting is no longer than one month, meaning you submitted after June 30th but before July 30th, the tax authority will not apply a penalty over €25 due to the low damage that this late submission causes to the Portuguese state.
In cases where the Tax Authority determines that your delay did not result in any damage, it is possible that no fine will be imposed on you. This can only occur if the taxpayer has not been previously convicted of any tax penalty. Following July 30th, the lowest fine that can be imposed is €37.50. Should the Tax Authority have already commenced an audit due to the taxpayer's non-compliance, the fine could escalate to €112.50. If the delay in submitting the declaration exceeds this period and causes harm to the Portuguese state, a fine ranging from €150 to €3,750 may be imposed.
In 2024, a change was made in the Portuguese State Budget Law stating that when a declaration is not submitted, the income earner is notified by registered letter to fulfill the obligation within 30 days. If the personal income tax return is not submitted within this period, the settlement will be carried out and the necessary deductions will be made. Until now, when taxpayers did not submit their tax return within the deadline, the Tax Authority would issue an assessment and did not consider the minimum subsistence level nor personal deductions, but now it will. However, you should always keep in mind that not all expenses may be considered and allocated in the right way, and penalties may still be applicable according to the situations referred to above.
It is important to consider that financial penalties are not the only disadvantage of filing a late tax return, as it won’t be possible when filing a joint tax return to opt for joint taxation. Also, it will not be possible to enjoy the I.M.I (Property tax) exemption when applicable. Besides that, filing a late tax return naturally means that processing your tax return will take more time than expected. In this sense, if you haven’t filed your tax return, it is strongly advised that you do so promptly to avoid any penalties or other disadvantages.
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