The reality is that, until recently, it was considered that a non-resident citizen would have such a tenuous connection to the Portuguese legal system that they would be unable to fulfil their tax obligations on their own.
During said period, article 19 of the General Tax Law, approved by Decree-Law no. 398/98 of 17 December, stated that a non-resident citizen was incapable of paying taxes and, consequently, it was mandatory to use the tax representation mechanism, whereby a natural or legal person who is subject to taxation in Portugal would represent them in all their tax obligations.
However, the incapacity was considered to be overcome if the non-resident citizen joined the electronic notification and summons system on the Finance Portal or the electronic mailbox, by Decree-Law no. 44/2022, of 8 July, amending the General Tax Law, leaving themselves in charge of monitoring his tax obligations through access to electronic means of communication which, in principle, will be accessible from wherever the subject is.
Nonetheless, the tax representation system remains relevant, not as a mechanism to overcome incapacity, but as a mechanism to streamline the tax procedure.
Both natural and legal persons, i.e. companies, can be tax representatives and benefit from it, regardless of whether they are considered incapable or not.
The representative, within the scope of their powers, is responsible for ancillary tax duties, including:
- Request tax identification number;
- Submit declarations;
- Receive correspondence from the Tax Administration;
- Exercise rights such as of complaint, appeal or objection before the Tax Administration;
However, the tax representative is not responsible for the main tax obligations, i.e. paying the taxes due. They are only responsible for notifying the taxpayer that the tax authorities have called on them to pay, and the represented tax subject must do so. The law makes only one exception, for situations in which the representative is a non-resident citizen who carries out an activity subject to Value Added Tax (VAT), and the representative is jointly and severally liable.
In short, tax representation loses its character as a full obligation for certain categories of taxable persons, but retains its value as a mechanism that makes it possible to delegate some of the obligations whose non-compliance has the potential to be more painful, and whose fulfilment is more time-consuming and inconvenient for a taxable subject.
Martínez Echevarría Lawyers
Vilamoura, 09 june of 2025
Leonor Gargaté Oliveira – Lawyer
Isabel Chowdhury – Trainee Lawyer
