IRS 2023
Index
pg. 22
3 - IRS settlement: refund or payment Who is entitled to an IRS refund? How to confirm if I have a declaration with refund? How is the refund IRS issued? How long does it take IRS refund? What if I have to pay IRS? Who can pay the IRS in installments? How to ask to pay IRS in installments?
pg. 5
1 - Introduction to the IRS What is the IRS? What is withholding tax? And what are the IRS brackets? What are the differences between IRS tiers and IRS withholding tables? What are IRS deductions? What is the Young IRS?
pg. 6 pg. 7 pg. 8 pg. 8
pg. 23 pg. 23
pg. 26
pg. 9 pg. 10
pg. 27
pg. 27 pg. 27
2 - Declare the IRS in 2023
pg. 12
What dates can the IRS not forget? How to prepare the delivery of the declaration from the IRS?
pg. 13 pg. 14
pg. 28
pg. 14 pg. 15
How to fill out the IRS declaration? What do you have to fill in if you submit the IRS declaration manually? What is the cover sheet? What annexes are there in the IRS declaration? How to validate and deliver the IRS declaration?
pg. 16 pg. 16
pg. 20
CHAPTER I
Introduction to the IRS
Going a little deeper into the IRS concept, this tax has six essential characteristics:
1 Introduction to the IRS
What is the IRS?
It is personal, since it takes into account your socio-economic situation and that of your family, namely regarding marital status, number of dependents or assets in your name, for example; It is progressive, that is, it is taxed according to the tax bracket in which the taxpayer falls: the higher the income level, the higher the rate to be applied; It is directly applied to a taxpayer's income; It is annual, that is, it falls on the income obtained during a year; It is taxed according to taxpayers' income statements ; It is applied to all income of residents in Portugal and income of non-residents that have been obtained in our country.
The IRS – Personal Income Tax – is a tax levied on taxpayers' income, except for exceptions described in the law.
As stated in paragraph 1 of article 1 of the Tax Code On the Income of Individuals (CIRS), “individual income tax (IRS) is levied on the annual value of income in the following categories, even when arising from unlawful acts, after making the corresponding deductions and
rebates:
Category A – Income from dependent work; Category B – Business and professional income; Category E – Income from capital; Category F – Property income; Category G – Equity increments; Category H – Pensions. Paragraph 2 of that article also mentions that “income, whether in cash or in kind, is subject to taxation, whatever the place where it is obtained, the currency and the way in which it is earned.”
What is withholding tax?
Understand the difference between direct and indirect taxes
It is a mechanism of the Portuguese tax system through which the State directly collects the salary of all employees (both public and private sector employees), pensioners or non-exempt self- employed workers. Thus, instead of them transferring the part of their salary that is subject to taxes to the State, it is the employer who does it.
There are two types of taxes levied in Portugal.
Direct taxes are so called because they are levied directly on taxpayers' salaries, being of a progressive nature, that is, the higher the income, the higher the taxation applied to the taxpayers.
In turn, indirect taxes apply to the prices of various goods and services, thus affecting consumption and reverting to the State. This is the case of VAT (Value Added Tax),IUC (Single Circulation Tax), from the IMT (Municipal Tax on Real Estate Transfers), among others.
The withholding tax is applied in the form of a fee levied directly and monthly on the salary, being defined annually through the so-called Tables withholding tax. These Tables are subdivided into the values that are applied to the mainland and those that refer to the Autonomous Regions of Madeira and the Azores individually.
In this sense, withholding tax falls under the category of direct taxes. Get a better understanding of this type of taxation.
Upon delivery of the IRS Declaration for the previous year, the State adjusts the taxes that taxpayers paid through this mechanism.
What are the differences between IRS tiers and IRS withholding tables?
And what are the IRS brackets?
IRS tiers are taxable income ranges
to which progressive tax rates apply. That is, according to what you receive, you will be inserted into a certain bracket, and the more you earn in a year, the higher the rate.
Although these two concepts often come up in the same conversation, they affect in different ways the amount you can later receive or pay from the IRS.
While the IRS scales tell you what you have to pay in tax at the end of the tax year, the withholding tables are used to tell you how much you will deduct each month for this purpose.
Essentially, the brackets are for you to calculate how much tax you are going to pay. To do this, you will need to know how much you earned in salary terms over the fiscal year. Afterwards, you will have to apply the respective rate for that tier. It is important to consult the different IRS levels to understand which rates you
And this will result in what you have to pay or receive when submitting the IRS return. Here the dynamic is very simple:
have to apply. There are nine different bands into which your taxable income falls.
will insert.
If over the year you have deducted more than the amount you actually have to pay, then you will receive IRS.
You can consult the IRS levels in the Individual Income Tax Code, in article 68.º, referring to the general rates applicable to 2022 earnings. To better understand the calculation of the amount payable.
If you haven't cashed in enough to cover the full amount of tax, then you will have to pay the remaining amount.
To increase the possible IRS reimbursement, there are benefits for taxpayers, either through the deduction of expenses incurred or, for those who have just started their professional career, the IRS Jovem initiative.
Painter
Doctor
Soccer player
What are IRS deductions?
Taxpayers can enjoy tax benefits by reducing the volume of taxes to be paid or through refunds, benefits that result from IRS deductions. Expenditure on education, health, housing, alimony, VAT upon proof of invoice, real estate and general family expenses are some of the deductions that can be made to help reduce the amount of this tax, having a significant impact on your wallet .
For example, imagine that you spent 500 euros on health in the year 2022. When you fill out your IRS declaration in 2023 you will be able to deduct a percentage of these expenses from your IRS or receive a refund corresponding to that value.
As there are maximum amounts to be respected, you will not be able to deduct all expenses incurred in 2022. Therefore, you will also have to understand the type of expenses you had over the past year and associate them with the respective field.
Maximum amount (per taxpayer)
Category
Deduction
General family expenses
Health
Take note The collection deduction increased from 726 euros to 900 euros per child up to the age of three. This measure only covers families with two or more children and is only applicable from the second child onwards.
Education
Properties
Taxpayers who earned less than the existence minimum, that is, whose annual net income is less than 1.5 IAS x 14, may also be exempt from IRS. That is, taxpayers who have net annual income below 10,089 euros do not have to pay this tax.
Homes
Retirement saving plans
VAT
What is the young IRS?
It is also necessary that they meet all of the following conditions:
The IRS Jovem consists of a taxation regime aimed at young people who start working for others and who, therefore, begin to have tax responsibilities for the first time in their lives. It translates into a discount to be applied on the amount of IRS ( Individual Income Tax) to switch off.
Are between 18 and 26 years old (in the case of a PhD, the limit is increased to 30 years old); Are not considered dependents, that is, do not belong to their parents' household; Have already completed their studies at level 4 (or higher) of the National Qualifications Framework.
This initiative was one of the measures initially implemented in the 2020 State Budget and its main objective is to facilitate the entry of many young people into life adult.
The amount deducted from the tax through the IRS Jovem is applied differently in the five years in which this tax benefit can be in force. In the first and second year, the amount of the discount is higher, decreasing by 10% in the following two years and decreasing again by 10% in the last year:
What are the conditions of access?
According to article 12.ºB of the IRS Code, In order to access the IRS Jovem, the taxable person in question cannot have declared their income for IRS purposes (as a non-dependent) before the year 2020.
Year Discount
Limit
10
Take note Since the IRS to be paid in 2023 refers to income from 2022, the maximum amounts were calculated based on the value of the Social Support Index defined for 2022 (443.20 euros). For 2024, in which you will have to declare the current year's income, the update proposed in the 2023 State Budget will be applied, which determines a 50% discount on the first year of membership.
The count of five years eligible for the Youth IRS regime begins on the day the young person earns the first Category A or B income (from self- employment), provided that these have been obtained during or after the year 2020, when this initiative has been implemented.
Even if you have completed your training more than a year ago, you can enjoy this benefit, as the count is relating to years of earnings.
11
CHAPTER II
....., ,..... . . . ,__,.
Preencher Declara�o .,,_..,,
Declare the IRS in 2023
2 Declare the IRS in 2023
April 1st to June 30th
Delivery of the 2023 IRS declaration, referring to the 2022 income, applicable to all taxpayers.
What dates can the IRS not forget? According to the document of declarative obligations 2023, provided by the Tax Authority, here are the important dates for the IRS which should point:
Until the 31st of July
Submission of the IRS Settlement Note by the Tax Authority, a document in which it is shown how your tax was calculated. This is also the deadline for receiving your refund, if you have delivered the declaration within the established deadlines.
Until February 27th Deadline for checking all expense invoices on the e-refatura platform, which you can access through the Finance Portal. Exceptionally, this year you had until this day to communicate changes to the constitution of your household familiar. March 1st to March 15th Between these dates, the amounts of collection deductions provided by validated invoices are available. March 15th to 31st Period in which you can claim the values of deductions from collection, if you do not agree with the information communicated. Until the 31st of March Until this date, you must make sure that the IBAN that appears in the Portal das Financeiras is the right place to receive as much as possible IRS refund.
Until the 31st of August Deadline to pay additional tax to the State, if you have to.
13
How to fill out the IRS declaration?
How to prepare the delivery of the IRS declaration?
The first step will be to access the Finance Portal. Currently, it is only possible to submit the IRS online, so you must make sure you have your access data (NIF and password) to enter the Portal.
To fill in your IRS declaration, simply choose the “Citizens” option when accessing the Finance Portal, which will redirect you to a new page where the IRS option is present.
If you are a new user, you must register and wait for the password to access your household. Don't forget to check amounts and claim invoices It is important that you make sure that all invoices entered in the Portal and all amounts deducted are before completing and submitting the declaration, as these will be reflected in what you will receive or pay from the IRS.
You can opt for the traditional declaration or the automatic IRS, the latter of which makes the process less time-consuming and boring, since the declaration is already completed and it is only necessary to confirm the data in this gifts.
In addition to expenses validated by invoices, It is in this section that you can access other deductible expenses with the IRS exempt from issuing an invoice, such as mortgage interest, user fees and school fees.
If you do not agree with the deduction amounts, you can file a claim with this entity until March 31st.
14
If you are covered by the situations in which you can choose the automatic IRS, you must select the option “Confirm Declaration” and check that all the data filled in are correct. After confirming the data, check the simulation and submit the one that is most favorable to you.
For those who want to join the Young IRS regime, as it is necessary to fill in the traditional IRS declaration (Model 3), more specifically Annex A, if you choose this regime, you will not be able to submit the Automatic IRS.
What do you have to fill in if you submit the IRS declaration manually? The Model 3 declaration is made up of a cover page and various annexes that refer to the taxpayer's different tax responsibilities. There are 12 attachments, listed from A to L, each intended for a specific purpose, to be delivered together with the cover page of the Model 3 declaration. It is not necessary for you to fill in all of them, just those that relate to your individual income and the nature of your same.
If you are not allowed to opt for the automatic IRS or if you need to correct some information, you must choose to submit a traditional tax return and follow the steps mentioned on the Portal to complete it.
15
If you want to choose an entity to be the beneficiary of the tax consignment, this is where you will have to put that indication. The IRS (Individual Income Tax) consignment consists of donating 0.5% of this assessed tax, that is, of the amount charged by the State after deducting collection deductions, to an eligible solidarity association for this purpose.
What is the cover sheet?
The cover page is the part of the IRS declaration that is intended to identify the taxpayer and the respective household members. Completing this sheet is mandatory for all individuals subject to the IRS.
It should be noted that the consignment for IRS purposes will not cost you anything. Essentially, the money you decide to donate thus goes to an institution at your school and not to the State. What annexes are there in the IRS declaration?
Annex A – Dependent work and pensions Annex A of the IRS is intended for all taxpayers who earn income from dependent work (category A) or pensions (category H).
If you are married or have children, it is in this part of the declaration that you will have to enter the household data. For couples there is also, in this section, the possibility of opting for joint taxation.
For couples subject to joint taxation, they must declare the income received by each member of their family (spouses and dependents). If taxation is done separately, you must declare what you received in the year in question and also half of the income from dependents.
Attention You must include your IBAN on the cover page so that you can later carry out the IRS refund, if this situation arises. The finances may recognize another reference than the one they prefer.
16
It is a form that covers the entire household, and each Model 3 declaration must present only one annex of this type.
Annex B - Category B income (Simplified Regime/Isolated Act)
Completing Annex B is for self-employed workers, covered by the simplified regime, who have business and professional income (category B) to declare or who present isolated acts subject to taxation.
How to fill out the Young IRS?
To opt for the Young IRS regime when submitting this tax return, you will have to fill in tables 4A and 4F in Annex A. In these sections, you will have to fill in several fields by indicating certain information, such as:
Unlike Annex A, this section is to be completed individually, therefore each member of the household who has income to declare of this nature must do so. separately, even for couples in joint taxation.
Your Tax Identification Number (NIF); The NIF of the Paying Entity; Income Code (You will have to choose option 417, referring to dependent employment income provided for in the Young IRS regime); Income received; IRS witholdings; Contributions to Social Security; Year of completion of the study cycle; Your level of education from the National Qualifications Framework (QNQ); Teaching establishment where he completed his studies.
This logic also applies if the couple has one or more dependents who also earn category B income, so three or more separate annexes will have to be completed.
Attention If the couple is taxed separately, then the rule similar to Annex A applies.
17
Attachment E – Income from capital Attachment E of the IRS declaration is intended to declare income arising from the investment of capital (category E) subject to withholding or special rates. These can be profits, financial insurance, interest on deposits, dividends, among others.
Annex C - Category B income (Organized Accounting Regime)
Annex C of the IRS declaration is, in practical terms, similar to B, this with regard to the nature of the income to be declared, and this section is intended for self-employed workers who are in an organized accounting regime, either by option or obligation.
This annex must be completed taking into account the income of all members of the household familiar.
In terms of practical applications for the household, when delivering the 2022 IRS, the same rules as for the previous attachment.
For couples subject to joint taxation, a single form is completed, but for separate taxation, it will be necessary for each spouse to complete their own annex (if there are dependents with capital income, it will be divided between the two elements of the couple).
Appendix D - Fiscal transparency The completion of Appendix D is only intended for taxpayers to whom income has been imputed within the scope of a fiscal transparency regime. It is therefore applicable to these types of situations:
Annex F - Property Income
Shareholders and members of companies subject to tax transparency that have imputed income to declare; Members of entities that are not resident in Portugal and enjoy a privileged tax regime in their country of origin; Heirs in an undivided inheritance regime who earn category B income.
If you present property income, such as the receipt of rents, then you will have to fill in Annex F of the declaration IRS.
Like Annex A and E, this form is not individual, and for couples (subject to joint or separate taxation) and their dependents, the same rules apply as in the aforementioned cases.
18
Given that these deductions from collection must be communicated in advance to Finance, these are already pre-filled in this annex, particularly in the cases of health, training and education expenses, general family expenses and charges for homes and properties intended for permanent housing.
Annex G – Capital gains and other equity increases For taxpayers who have sold a property, it is in Annex G that they can declare the capital gains or losses associated with the house.
This annex also serves to declare capital gains on the sale of shares and other investment securities, and filling it out is not individual and concerns the income of the entire household.
If you hold exempt income, additions to your income or collection for non-compliance with the redemption of products with tax benefits, these must be indicated in this attachment.
Annex G1 - Untaxed capital gains For all capital gains that are not subject to taxation, these are presented in Annex G1. It is a form that applies to the income of all household members familiar.
As in Annexes A and F, when submitting the IRS, you must take into account that the filling is done based on the income of all members of the household (spouses and dependents).
The purpose of this section is to inform Finance that the taxpayer has obtained capital gains, such as the sale of shares held for more than 24 months, and that these, by their nature, are not subject to tax.
Appendix I – Income from Undivided Inheritance This appendix is intended only for category B income that is determined by the head of the couple or the person responsible for the undivided inheritance that will be allocated to the remaining heirs according to their shares.
Annex H – Tax benefits and deductions Annex H of the IRS declaration is where the tax deductions related to expenses accepted for this purpose are declared, according to the IRS Code and the Tax Benefits Statute.
Annex I always requires filling in Annex B or C relating to undivided inheritance income.
19
Annex J – Income obtained abroad Annex J of the IRS declaration is an individual form that is intended to communicate income obtained abroad whose declaration is mandatory in Portugal.
How to validate and deliver the IRS declaration?
After completing the declaration (if you choose the traditional one) or confirming that your automatic IRS data is correct, click on the “validar” option. Once validated, you can proceed with the simulation to find out the amount to be paid or received. Once both steps have been completed, simply submit your statement, saving or printing proof of submission.
Take note This annex is also useful for identifying securities or deposit accounts originating from foreign institutions.
Two days after submitting your statement, we suggest that you check its status to confirm that the information has been properly sent. If you detect any irregularities, you can correct them by selecting the “IRS – Correct” option.
Annex L - Non-habitual resident Finally, Annex L is exclusive to taxpayers who have the status of non-habitual resident in Portugal.
It is also a form to be filled out individually, which must include income earned through activities with high added value, whether of a scientific, technical or artistic nature.
Once the “Approved” status has been reached, you must obtain proof to save or print your statement. Obtaining the proof is done on the Finance Portal, in the same area where you submitted your statement.
Take note You must also mention the intended method in order to be exempt from international double taxation.
Take note Don't leave your IRS tax return to the last minute. Normally, the last days of the delivery period have a greater affluence on the Finance Portal, which can make the process more difficult.
20
CHAPTER Ill IRS settlement: return or payout?
3 IRS Settlement: Refund or Payment?
How do I confirm that I have a refund statement?
After submitting the statement, if you want to check whether you will, in fact, receive an IRS refund, you will need to check the status of your issue on the Finance Portal. To do so, you will need to follow these steps: #1 – Accessing the Finance Portal Once you are on the site, you will have to enter the IRS section. This will usually be available on the homepage. However, if you cannot find it, you can always search for “IRS” in the search bar.
Who is entitled to an IRS refund? In order to receive the IRS refund, you must have witholding tax of their income in the year corresponding to the declaration of this tax (in 2023 the declaration for 2022 is submitted). Only after delivery of this document will you be able to access a refund or not.
In order to receive reimbursement, a taxpayer will have to withhold at source an amount greater than what he will have to pay to the IRS. If the opposite is true, then you will not be refunded and will have to pay the remaining amount. Through the Finance Portal it is possible to consult your situation, so that you can understand how much will result from the IRS settlement, whether it be the refund or the amount you will have to pay in additional tax. If you have other debts with the Tax and Customs Authority, the reimbursement amount will be used for the automatic payment of those debts. If you still have money left over from this debt settlement, then that amount will be given to you by Finance.
23
#2 – Authenticate your login on this platform Later, to authenticate your login on this platform, you will have to indicate your tax number (NIF) and your password to access the portal.
#4 – Select the year to search On the page referring to the consultation of the statement, you will have to select the year whose income you want to consult. For this year's IRS refund, the option to choose is “2022”. Then click on “Pesquisar”.
#5 – Check the status of the declaration After choosing the year you want, data regarding the declaration submitted in that same year will be made available. Here you can consult the status of the statement itself.
#3 – Consult the IRS declaration Once you are in the IRS section, on your left you will find a menu with several options. Select “Consultar declaração”.
24
There are four possible states for it, which constitute the stages of the refund or payment process Additional IRS:
“Liquidada” – Does this message mean that the tax to be received (or to be paid, as the case may be) has already been determined by the finance
- “Declaração Certa” – The declaration was validated without central errors;
- “Liquidação Processada” – Your tax bills have been cleared;
- “Reembolso Emitido” – There is no discrepancy or tax debt and the refund will be delivered within a few days;
- “Pagamento confirmado” – the IRS refund has already been settled.
“Liquidada com reembolso emitido” – At this stage, the bank transfer order for your IRS refund already exists, and it should take about three days to enter your account.
“Liquidada com nota de cobrança emitida” – If you are in this status, it means that you will have to pay additional tax and you will have available the necessary information to make the payment.
If you are really going to receive a refund from the IRS, the statement delivered may pass through several states before the money enters your checking account. If you receive any of the messages below, find out what they mean:
“Liquidada com saldo nulo emitido” – When you receive this message, know that the final tax bills resulted in zero, so no receipt or collection note will be issued.
“Rececionada – awaiting validation” – This phase refers to the period in which the Tax and Customs Authority will determine whether there is any error in the declared data, this after delivering the IRS declaration.
“Notificação emitida” – Refers only to those who will pay tax, being only the notification that will have to make the payment by the established deadline. Attention If, at the end of the day, you have tax to pay, you will receive a collection note from the Treasury that you must settle by August 31st.
““Certa após validação” – If you receive this notification it means that your declaration does not present any irregularity.
25
#6 – Ver detalhes da declaração You can consult your tax situation in detail by clicking on “Ver detalhe” - view detail.
How is the IRS refund issued? There are two ways in which the refund can be paid to you:
Bank transfer This is the default option for this operation. The IBAN reference that is communicated to the Tax Authorities is the one that will be used to deliver the IRS refund. If the information you provided is not valid, you must update it in order to present a reference that appears in the database of the Tax and Customs Authority. When choosing this method, after the refund is issued, you will have to wait at least three business days for the money to enter your personal account.
After selecting this option, various information is available, such as the type of declaration, the dates of receipt and its situation. You should pay attention to the section referring to the “Montante” - amount, in which you can see how much you will receive as a refund from the IRS.
Check
If you do not present a valid IBAN, a check will be issued to your tax address. When you receive that check, you will only have 60 days to deposit it and receive your IRS refund.
If you do not deposit your check within this period, you can request its reactivation. This process also has a maximum period, and you can make this request within a period of five years, counting from the settlement date.
26
What if I have to pay IRS?
How long does the IRS refund take?
Although there is no exact predetermined time to receive the refund from the IRS, last year the Government established an average period of 17 days. However, the length of this process varies from taxpayer to taxpayer. Finance established the following projections:
It is possible that your IRS calculation does not result in a refund, but rather an additional charge. If this happens to you, the Tax and Customs Authority will send you a note of charge that must be settled by the 31st of August.
If you find it difficult to manage all the expenses and are unable to meet that deadline, know that you can pay the IRS in unsecured installments.
Delivery method
Waiting Time
Who can pay the IRS in installments?
days
days
This payment method is intended for taxpayers who have a tax payable equal to or less than 5,000 euros. This operation can thus be carried out in installments without the need to present a guarantee.
According to the law, the deadline established for the Tax and Customs Authority to deliver the IRS refund is August 31. This deadline is only applied if you respect the remaining deadlines of the IRS, which dictate that the delivery of the IRS declaration must be made by June 30th.
In order to do so, you must not have any debt prior to the Tax Authorities and you must have delivered your IRS statement within the deadlines stipulated for it.
Therefore, you must submit this tax return, either by automatic IRS or by manually completing the Model 3 return. The sooner you submit your IRS return, the sooner you can receive the potential refund.
If you meet these conditions and are unable to pay the additional tax before August 31st, you can then request to pay this amount in installments.
27
How to ask to pay IRS in installments?
3. In the option “Installation plans”, you will have to click on “Access”;
It is possible to request to pay IRS in installments through the Finance Portal. Just follow these ten steps:
1. Access the Finance Portal and authenticate your registration on “Login”. You will need to indicate your taxpayer and his access password;
4. Choose the option “Simulate/Register order” and click on “Registration”;
5. The billing note relating to the payment of the IRS will be displayed, and at this stage click on “Simulate”;
2. Search for “installments” in the search bar;
6. You will have to select the option “No guarantee” and click on “Confirm”;
7. To simulate the installment plan, you must choose the number of installments according to the table provided above;
28
- In the section referring to the “Economic Reason” you will have to choose, among the options presented in the list, the one that best suits your situation;
- In “Justification of the reason indicated above”, write, briefly, the reason why you are making the request to pay IRS in installments;
- Finally, you can officially register your request.
After making your request, the Tax and Customs Authority analyzes your situation (to check if there are other debts) and, if your tax situation is regularized, the application is automatically granted.
29
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Transcript
IRS 2023
Index
pg. 22
3 - IRS settlement: refund or payment Who is entitled to an IRS refund? How to confirm if I have a declaration with refund? How is the refund IRS issued? How long does it take IRS refund? What if I have to pay IRS? Who can pay the IRS in installments? How to ask to pay IRS in installments?
pg. 5
1 - Introduction to the IRS What is the IRS? What is withholding tax? And what are the IRS brackets? What are the differences between IRS tiers and IRS withholding tables? What are IRS deductions? What is the Young IRS?
pg. 6 pg. 7 pg. 8 pg. 8
pg. 23 pg. 23
pg. 26
pg. 9 pg. 10
pg. 27
pg. 27 pg. 27
2 - Declare the IRS in 2023
pg. 12
What dates can the IRS not forget? How to prepare the delivery of the declaration from the IRS?
pg. 13 pg. 14
pg. 28
pg. 14 pg. 15
How to fill out the IRS declaration? What do you have to fill in if you submit the IRS declaration manually? What is the cover sheet? What annexes are there in the IRS declaration? How to validate and deliver the IRS declaration?
pg. 16 pg. 16
pg. 20
CHAPTER I
Introduction to the IRS
Going a little deeper into the IRS concept, this tax has six essential characteristics:
1 Introduction to the IRS
What is the IRS?
It is personal, since it takes into account your socio-economic situation and that of your family, namely regarding marital status, number of dependents or assets in your name, for example; It is progressive, that is, it is taxed according to the tax bracket in which the taxpayer falls: the higher the income level, the higher the rate to be applied; It is directly applied to a taxpayer's income; It is annual, that is, it falls on the income obtained during a year; It is taxed according to taxpayers' income statements ; It is applied to all income of residents in Portugal and income of non-residents that have been obtained in our country.
The IRS – Personal Income Tax – is a tax levied on taxpayers' income, except for exceptions described in the law.
As stated in paragraph 1 of article 1 of the Tax Code On the Income of Individuals (CIRS), “individual income tax (IRS) is levied on the annual value of income in the following categories, even when arising from unlawful acts, after making the corresponding deductions and
rebates:
Category A – Income from dependent work; Category B – Business and professional income; Category E – Income from capital; Category F – Property income; Category G – Equity increments; Category H – Pensions. Paragraph 2 of that article also mentions that “income, whether in cash or in kind, is subject to taxation, whatever the place where it is obtained, the currency and the way in which it is earned.”
What is withholding tax?
Understand the difference between direct and indirect taxes
It is a mechanism of the Portuguese tax system through which the State directly collects the salary of all employees (both public and private sector employees), pensioners or non-exempt self- employed workers. Thus, instead of them transferring the part of their salary that is subject to taxes to the State, it is the employer who does it.
There are two types of taxes levied in Portugal.
Direct taxes are so called because they are levied directly on taxpayers' salaries, being of a progressive nature, that is, the higher the income, the higher the taxation applied to the taxpayers.
In turn, indirect taxes apply to the prices of various goods and services, thus affecting consumption and reverting to the State. This is the case of VAT (Value Added Tax),IUC (Single Circulation Tax), from the IMT (Municipal Tax on Real Estate Transfers), among others.
The withholding tax is applied in the form of a fee levied directly and monthly on the salary, being defined annually through the so-called Tables withholding tax. These Tables are subdivided into the values that are applied to the mainland and those that refer to the Autonomous Regions of Madeira and the Azores individually.
In this sense, withholding tax falls under the category of direct taxes. Get a better understanding of this type of taxation.
Upon delivery of the IRS Declaration for the previous year, the State adjusts the taxes that taxpayers paid through this mechanism.
What are the differences between IRS tiers and IRS withholding tables?
And what are the IRS brackets?
IRS tiers are taxable income ranges
to which progressive tax rates apply. That is, according to what you receive, you will be inserted into a certain bracket, and the more you earn in a year, the higher the rate.
Although these two concepts often come up in the same conversation, they affect in different ways the amount you can later receive or pay from the IRS.
While the IRS scales tell you what you have to pay in tax at the end of the tax year, the withholding tables are used to tell you how much you will deduct each month for this purpose.
Essentially, the brackets are for you to calculate how much tax you are going to pay. To do this, you will need to know how much you earned in salary terms over the fiscal year. Afterwards, you will have to apply the respective rate for that tier. It is important to consult the different IRS levels to understand which rates you
And this will result in what you have to pay or receive when submitting the IRS return. Here the dynamic is very simple:
have to apply. There are nine different bands into which your taxable income falls.
will insert.
If over the year you have deducted more than the amount you actually have to pay, then you will receive IRS.
You can consult the IRS levels in the Individual Income Tax Code, in article 68.º, referring to the general rates applicable to 2022 earnings. To better understand the calculation of the amount payable.
If you haven't cashed in enough to cover the full amount of tax, then you will have to pay the remaining amount.
To increase the possible IRS reimbursement, there are benefits for taxpayers, either through the deduction of expenses incurred or, for those who have just started their professional career, the IRS Jovem initiative.
Painter
Doctor
Soccer player
What are IRS deductions?
Taxpayers can enjoy tax benefits by reducing the volume of taxes to be paid or through refunds, benefits that result from IRS deductions. Expenditure on education, health, housing, alimony, VAT upon proof of invoice, real estate and general family expenses are some of the deductions that can be made to help reduce the amount of this tax, having a significant impact on your wallet .
For example, imagine that you spent 500 euros on health in the year 2022. When you fill out your IRS declaration in 2023 you will be able to deduct a percentage of these expenses from your IRS or receive a refund corresponding to that value.
As there are maximum amounts to be respected, you will not be able to deduct all expenses incurred in 2022. Therefore, you will also have to understand the type of expenses you had over the past year and associate them with the respective field.
Maximum amount (per taxpayer)
Category
Deduction
General family expenses
Health
Take note The collection deduction increased from 726 euros to 900 euros per child up to the age of three. This measure only covers families with two or more children and is only applicable from the second child onwards.
Education
Properties
Taxpayers who earned less than the existence minimum, that is, whose annual net income is less than 1.5 IAS x 14, may also be exempt from IRS. That is, taxpayers who have net annual income below 10,089 euros do not have to pay this tax.
Homes
Retirement saving plans
VAT
What is the young IRS?
It is also necessary that they meet all of the following conditions:
The IRS Jovem consists of a taxation regime aimed at young people who start working for others and who, therefore, begin to have tax responsibilities for the first time in their lives. It translates into a discount to be applied on the amount of IRS ( Individual Income Tax) to switch off.
Are between 18 and 26 years old (in the case of a PhD, the limit is increased to 30 years old); Are not considered dependents, that is, do not belong to their parents' household; Have already completed their studies at level 4 (or higher) of the National Qualifications Framework.
This initiative was one of the measures initially implemented in the 2020 State Budget and its main objective is to facilitate the entry of many young people into life adult.
The amount deducted from the tax through the IRS Jovem is applied differently in the five years in which this tax benefit can be in force. In the first and second year, the amount of the discount is higher, decreasing by 10% in the following two years and decreasing again by 10% in the last year:
What are the conditions of access?
According to article 12.ºB of the IRS Code, In order to access the IRS Jovem, the taxable person in question cannot have declared their income for IRS purposes (as a non-dependent) before the year 2020.
Year Discount
Limit
10
Take note Since the IRS to be paid in 2023 refers to income from 2022, the maximum amounts were calculated based on the value of the Social Support Index defined for 2022 (443.20 euros). For 2024, in which you will have to declare the current year's income, the update proposed in the 2023 State Budget will be applied, which determines a 50% discount on the first year of membership.
The count of five years eligible for the Youth IRS regime begins on the day the young person earns the first Category A or B income (from self- employment), provided that these have been obtained during or after the year 2020, when this initiative has been implemented.
Even if you have completed your training more than a year ago, you can enjoy this benefit, as the count is relating to years of earnings.
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CHAPTER II
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Preencher Declara�o .,,_..,,
Declare the IRS in 2023
2 Declare the IRS in 2023
April 1st to June 30th
Delivery of the 2023 IRS declaration, referring to the 2022 income, applicable to all taxpayers.
What dates can the IRS not forget? According to the document of declarative obligations 2023, provided by the Tax Authority, here are the important dates for the IRS which should point:
Until the 31st of July
Submission of the IRS Settlement Note by the Tax Authority, a document in which it is shown how your tax was calculated. This is also the deadline for receiving your refund, if you have delivered the declaration within the established deadlines.
Until February 27th Deadline for checking all expense invoices on the e-refatura platform, which you can access through the Finance Portal. Exceptionally, this year you had until this day to communicate changes to the constitution of your household familiar. March 1st to March 15th Between these dates, the amounts of collection deductions provided by validated invoices are available. March 15th to 31st Period in which you can claim the values of deductions from collection, if you do not agree with the information communicated. Until the 31st of March Until this date, you must make sure that the IBAN that appears in the Portal das Financeiras is the right place to receive as much as possible IRS refund.
Until the 31st of August Deadline to pay additional tax to the State, if you have to.
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How to fill out the IRS declaration?
How to prepare the delivery of the IRS declaration?
The first step will be to access the Finance Portal. Currently, it is only possible to submit the IRS online, so you must make sure you have your access data (NIF and password) to enter the Portal.
To fill in your IRS declaration, simply choose the “Citizens” option when accessing the Finance Portal, which will redirect you to a new page where the IRS option is present.
If you are a new user, you must register and wait for the password to access your household. Don't forget to check amounts and claim invoices It is important that you make sure that all invoices entered in the Portal and all amounts deducted are before completing and submitting the declaration, as these will be reflected in what you will receive or pay from the IRS.
You can opt for the traditional declaration or the automatic IRS, the latter of which makes the process less time-consuming and boring, since the declaration is already completed and it is only necessary to confirm the data in this gifts.
In addition to expenses validated by invoices, It is in this section that you can access other deductible expenses with the IRS exempt from issuing an invoice, such as mortgage interest, user fees and school fees.
If you do not agree with the deduction amounts, you can file a claim with this entity until March 31st.
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If you are covered by the situations in which you can choose the automatic IRS, you must select the option “Confirm Declaration” and check that all the data filled in are correct. After confirming the data, check the simulation and submit the one that is most favorable to you.
For those who want to join the Young IRS regime, as it is necessary to fill in the traditional IRS declaration (Model 3), more specifically Annex A, if you choose this regime, you will not be able to submit the Automatic IRS.
What do you have to fill in if you submit the IRS declaration manually? The Model 3 declaration is made up of a cover page and various annexes that refer to the taxpayer's different tax responsibilities. There are 12 attachments, listed from A to L, each intended for a specific purpose, to be delivered together with the cover page of the Model 3 declaration. It is not necessary for you to fill in all of them, just those that relate to your individual income and the nature of your same.
If you are not allowed to opt for the automatic IRS or if you need to correct some information, you must choose to submit a traditional tax return and follow the steps mentioned on the Portal to complete it.
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If you want to choose an entity to be the beneficiary of the tax consignment, this is where you will have to put that indication. The IRS (Individual Income Tax) consignment consists of donating 0.5% of this assessed tax, that is, of the amount charged by the State after deducting collection deductions, to an eligible solidarity association for this purpose.
What is the cover sheet?
The cover page is the part of the IRS declaration that is intended to identify the taxpayer and the respective household members. Completing this sheet is mandatory for all individuals subject to the IRS.
It should be noted that the consignment for IRS purposes will not cost you anything. Essentially, the money you decide to donate thus goes to an institution at your school and not to the State. What annexes are there in the IRS declaration?
Annex A – Dependent work and pensions Annex A of the IRS is intended for all taxpayers who earn income from dependent work (category A) or pensions (category H).
If you are married or have children, it is in this part of the declaration that you will have to enter the household data. For couples there is also, in this section, the possibility of opting for joint taxation.
For couples subject to joint taxation, they must declare the income received by each member of their family (spouses and dependents). If taxation is done separately, you must declare what you received in the year in question and also half of the income from dependents.
Attention You must include your IBAN on the cover page so that you can later carry out the IRS refund, if this situation arises. The finances may recognize another reference than the one they prefer.
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It is a form that covers the entire household, and each Model 3 declaration must present only one annex of this type.
Annex B - Category B income (Simplified Regime/Isolated Act)
Completing Annex B is for self-employed workers, covered by the simplified regime, who have business and professional income (category B) to declare or who present isolated acts subject to taxation.
How to fill out the Young IRS?
To opt for the Young IRS regime when submitting this tax return, you will have to fill in tables 4A and 4F in Annex A. In these sections, you will have to fill in several fields by indicating certain information, such as:
Unlike Annex A, this section is to be completed individually, therefore each member of the household who has income to declare of this nature must do so. separately, even for couples in joint taxation.
Your Tax Identification Number (NIF); The NIF of the Paying Entity; Income Code (You will have to choose option 417, referring to dependent employment income provided for in the Young IRS regime); Income received; IRS witholdings; Contributions to Social Security; Year of completion of the study cycle; Your level of education from the National Qualifications Framework (QNQ); Teaching establishment where he completed his studies.
This logic also applies if the couple has one or more dependents who also earn category B income, so three or more separate annexes will have to be completed.
Attention If the couple is taxed separately, then the rule similar to Annex A applies.
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Attachment E – Income from capital Attachment E of the IRS declaration is intended to declare income arising from the investment of capital (category E) subject to withholding or special rates. These can be profits, financial insurance, interest on deposits, dividends, among others.
Annex C - Category B income (Organized Accounting Regime)
Annex C of the IRS declaration is, in practical terms, similar to B, this with regard to the nature of the income to be declared, and this section is intended for self-employed workers who are in an organized accounting regime, either by option or obligation.
This annex must be completed taking into account the income of all members of the household familiar.
In terms of practical applications for the household, when delivering the 2022 IRS, the same rules as for the previous attachment.
For couples subject to joint taxation, a single form is completed, but for separate taxation, it will be necessary for each spouse to complete their own annex (if there are dependents with capital income, it will be divided between the two elements of the couple).
Appendix D - Fiscal transparency The completion of Appendix D is only intended for taxpayers to whom income has been imputed within the scope of a fiscal transparency regime. It is therefore applicable to these types of situations:
Annex F - Property Income
Shareholders and members of companies subject to tax transparency that have imputed income to declare; Members of entities that are not resident in Portugal and enjoy a privileged tax regime in their country of origin; Heirs in an undivided inheritance regime who earn category B income.
If you present property income, such as the receipt of rents, then you will have to fill in Annex F of the declaration IRS.
Like Annex A and E, this form is not individual, and for couples (subject to joint or separate taxation) and their dependents, the same rules apply as in the aforementioned cases.
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Given that these deductions from collection must be communicated in advance to Finance, these are already pre-filled in this annex, particularly in the cases of health, training and education expenses, general family expenses and charges for homes and properties intended for permanent housing.
Annex G – Capital gains and other equity increases For taxpayers who have sold a property, it is in Annex G that they can declare the capital gains or losses associated with the house.
This annex also serves to declare capital gains on the sale of shares and other investment securities, and filling it out is not individual and concerns the income of the entire household.
If you hold exempt income, additions to your income or collection for non-compliance with the redemption of products with tax benefits, these must be indicated in this attachment.
Annex G1 - Untaxed capital gains For all capital gains that are not subject to taxation, these are presented in Annex G1. It is a form that applies to the income of all household members familiar.
As in Annexes A and F, when submitting the IRS, you must take into account that the filling is done based on the income of all members of the household (spouses and dependents).
The purpose of this section is to inform Finance that the taxpayer has obtained capital gains, such as the sale of shares held for more than 24 months, and that these, by their nature, are not subject to tax.
Appendix I – Income from Undivided Inheritance This appendix is intended only for category B income that is determined by the head of the couple or the person responsible for the undivided inheritance that will be allocated to the remaining heirs according to their shares.
Annex H – Tax benefits and deductions Annex H of the IRS declaration is where the tax deductions related to expenses accepted for this purpose are declared, according to the IRS Code and the Tax Benefits Statute.
Annex I always requires filling in Annex B or C relating to undivided inheritance income.
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Annex J – Income obtained abroad Annex J of the IRS declaration is an individual form that is intended to communicate income obtained abroad whose declaration is mandatory in Portugal.
How to validate and deliver the IRS declaration?
After completing the declaration (if you choose the traditional one) or confirming that your automatic IRS data is correct, click on the “validar” option. Once validated, you can proceed with the simulation to find out the amount to be paid or received. Once both steps have been completed, simply submit your statement, saving or printing proof of submission.
Take note This annex is also useful for identifying securities or deposit accounts originating from foreign institutions.
Two days after submitting your statement, we suggest that you check its status to confirm that the information has been properly sent. If you detect any irregularities, you can correct them by selecting the “IRS – Correct” option.
Annex L - Non-habitual resident Finally, Annex L is exclusive to taxpayers who have the status of non-habitual resident in Portugal.
It is also a form to be filled out individually, which must include income earned through activities with high added value, whether of a scientific, technical or artistic nature.
Once the “Approved” status has been reached, you must obtain proof to save or print your statement. Obtaining the proof is done on the Finance Portal, in the same area where you submitted your statement.
Take note You must also mention the intended method in order to be exempt from international double taxation.
Take note Don't leave your IRS tax return to the last minute. Normally, the last days of the delivery period have a greater affluence on the Finance Portal, which can make the process more difficult.
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CHAPTER Ill IRS settlement: return or payout?
3 IRS Settlement: Refund or Payment?
How do I confirm that I have a refund statement?
After submitting the statement, if you want to check whether you will, in fact, receive an IRS refund, you will need to check the status of your issue on the Finance Portal. To do so, you will need to follow these steps: #1 – Accessing the Finance Portal Once you are on the site, you will have to enter the IRS section. This will usually be available on the homepage. However, if you cannot find it, you can always search for “IRS” in the search bar.
Who is entitled to an IRS refund? In order to receive the IRS refund, you must have witholding tax of their income in the year corresponding to the declaration of this tax (in 2023 the declaration for 2022 is submitted). Only after delivery of this document will you be able to access a refund or not.
In order to receive reimbursement, a taxpayer will have to withhold at source an amount greater than what he will have to pay to the IRS. If the opposite is true, then you will not be refunded and will have to pay the remaining amount. Through the Finance Portal it is possible to consult your situation, so that you can understand how much will result from the IRS settlement, whether it be the refund or the amount you will have to pay in additional tax. If you have other debts with the Tax and Customs Authority, the reimbursement amount will be used for the automatic payment of those debts. If you still have money left over from this debt settlement, then that amount will be given to you by Finance.
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#2 – Authenticate your login on this platform Later, to authenticate your login on this platform, you will have to indicate your tax number (NIF) and your password to access the portal.
#4 – Select the year to search On the page referring to the consultation of the statement, you will have to select the year whose income you want to consult. For this year's IRS refund, the option to choose is “2022”. Then click on “Pesquisar”.
#5 – Check the status of the declaration After choosing the year you want, data regarding the declaration submitted in that same year will be made available. Here you can consult the status of the statement itself.
#3 – Consult the IRS declaration Once you are in the IRS section, on your left you will find a menu with several options. Select “Consultar declaração”.
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There are four possible states for it, which constitute the stages of the refund or payment process Additional IRS:
“Liquidada” – Does this message mean that the tax to be received (or to be paid, as the case may be) has already been determined by the finance
“Liquidada com reembolso emitido” – At this stage, the bank transfer order for your IRS refund already exists, and it should take about three days to enter your account.
“Liquidada com nota de cobrança emitida” – If you are in this status, it means that you will have to pay additional tax and you will have available the necessary information to make the payment.
If you are really going to receive a refund from the IRS, the statement delivered may pass through several states before the money enters your checking account. If you receive any of the messages below, find out what they mean:
“Liquidada com saldo nulo emitido” – When you receive this message, know that the final tax bills resulted in zero, so no receipt or collection note will be issued.
“Rececionada – awaiting validation” – This phase refers to the period in which the Tax and Customs Authority will determine whether there is any error in the declared data, this after delivering the IRS declaration.
“Notificação emitida” – Refers only to those who will pay tax, being only the notification that will have to make the payment by the established deadline. Attention If, at the end of the day, you have tax to pay, you will receive a collection note from the Treasury that you must settle by August 31st.
““Certa após validação” – If you receive this notification it means that your declaration does not present any irregularity.
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#6 – Ver detalhes da declaração You can consult your tax situation in detail by clicking on “Ver detalhe” - view detail.
How is the IRS refund issued? There are two ways in which the refund can be paid to you:
Bank transfer This is the default option for this operation. The IBAN reference that is communicated to the Tax Authorities is the one that will be used to deliver the IRS refund. If the information you provided is not valid, you must update it in order to present a reference that appears in the database of the Tax and Customs Authority. When choosing this method, after the refund is issued, you will have to wait at least three business days for the money to enter your personal account.
After selecting this option, various information is available, such as the type of declaration, the dates of receipt and its situation. You should pay attention to the section referring to the “Montante” - amount, in which you can see how much you will receive as a refund from the IRS.
Check
If you do not present a valid IBAN, a check will be issued to your tax address. When you receive that check, you will only have 60 days to deposit it and receive your IRS refund.
If you do not deposit your check within this period, you can request its reactivation. This process also has a maximum period, and you can make this request within a period of five years, counting from the settlement date.
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What if I have to pay IRS?
How long does the IRS refund take?
Although there is no exact predetermined time to receive the refund from the IRS, last year the Government established an average period of 17 days. However, the length of this process varies from taxpayer to taxpayer. Finance established the following projections:
It is possible that your IRS calculation does not result in a refund, but rather an additional charge. If this happens to you, the Tax and Customs Authority will send you a note of charge that must be settled by the 31st of August.
If you find it difficult to manage all the expenses and are unable to meet that deadline, know that you can pay the IRS in unsecured installments.
Delivery method
Waiting Time
Who can pay the IRS in installments?
days
days
This payment method is intended for taxpayers who have a tax payable equal to or less than 5,000 euros. This operation can thus be carried out in installments without the need to present a guarantee.
According to the law, the deadline established for the Tax and Customs Authority to deliver the IRS refund is August 31. This deadline is only applied if you respect the remaining deadlines of the IRS, which dictate that the delivery of the IRS declaration must be made by June 30th.
In order to do so, you must not have any debt prior to the Tax Authorities and you must have delivered your IRS statement within the deadlines stipulated for it.
Therefore, you must submit this tax return, either by automatic IRS or by manually completing the Model 3 return. The sooner you submit your IRS return, the sooner you can receive the potential refund.
If you meet these conditions and are unable to pay the additional tax before August 31st, you can then request to pay this amount in installments.
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How to ask to pay IRS in installments?
3. In the option “Installation plans”, you will have to click on “Access”;
It is possible to request to pay IRS in installments through the Finance Portal. Just follow these ten steps:
1. Access the Finance Portal and authenticate your registration on “Login”. You will need to indicate your taxpayer and his access password;
4. Choose the option “Simulate/Register order” and click on “Registration”;
5. The billing note relating to the payment of the IRS will be displayed, and at this stage click on “Simulate”;
2. Search for “installments” in the search bar;
6. You will have to select the option “No guarantee” and click on “Confirm”;
7. To simulate the installment plan, you must choose the number of installments according to the table provided above;
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- In the section referring to the “Economic Reason” you will have to choose, among the options presented in the list, the one that best suits your situation;
- In “Justification of the reason indicated above”, write, briefly, the reason why you are making the request to pay IRS in installments;
- Finally, you can officially register your request.
After making your request, the Tax and Customs Authority analyzes your situation (to check if there are other debts) and, if your tax situation is regularized, the application is automatically granted.29
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