With the purpose of regulating properly the activity of short term touristic lettings, Portugal has introduced the Local Lodging regime (in Portuguese Alojamento Local or AL).
The activity of short term touristic lettings carried out by property holders will be qualified in the framework of category B (Business Income) regarding Personal Income Taxation instead of category F (Rental Income).
The fiscal year in Portugal corresponds to the calendar year. Business activities fall into Category B and are reported in the second internet filing period in May. For Residents, net local lodging invoicing is added to other sources of income, such as pensions, dividends, etc. Tax is calculated at marginal rates. Non-Residents are assessed at a flat rate of 25%.
Property holders who wish to explore their properties on this regime should:
– Register the start of activity before the Tax Authority for Personal Income Tax and VAT purposes, on the respective local accommodation category (CAE 55201 or 55204);
– Submit a request to the City Hall of the property’s municipality to award the property with the respective local accommodation license.
“AT”, the Portuguese tax authority, requires a business activity registration as an instrumental part of the Local Lodging registration process. The legislation sets up automatic channels of communication between the National Tourist Board (“Turismo de Portugal”) and the Revenue in an effort to make non-reporting and tax fraud more difficult than ever before.
“SEF” (Serviço de Estrangeiros e Fronteiras or the Immigration and Borders Service) is responsible for monitoring the entry, exit and the presence of foreigners in Portugal. As in other countries in Europe and around the world, the State reserves the right to monitor foreign nationals within its borders. When foreigners stay in commercial accommodations such as a hotel or a Local Lodging establishment, these tourist facilities are required to register the arrival and departure with “SEF”.
1 - Registration of the professional activity with the Tax Authority for IRS / IRC and VAT purposes, with the respective classification in the category of local accommodation;
2 - Obtaining the Local Accommodation License (+ assistance in obtaining the necessary equipment);
2 - When applicable, requesting for the exemption of Social Security contributions arising from the Local Accommodation activity;
3 - Issuing invoices of all amounts received from clients (advances and payment of stays);
4 - Preparation and submission of VAT declarations, if the annual turnover exceeds the value of €10,000.00;
5 - Preparation and submission of the annual return tax declarations (IRS or IRC).
PT - Âmbito dos nossos serviços
1 – Registo do início da actividade junto da Autoridade Tributária para efeitos de IRS/IRC e IVA, com o respectivo enquadramento na categoria do alojamento local;
2– Obtenção da Licença de Alojamento Local (e assistencia na obtenção dos equipamentos necessários);
2 – Quando aplicável, requerer a isenção de contribuições para a Segurança Social decorrente da actividade de Alojamento Local;
3 – Emissão de facturas de todos os valores recebidos dos clientes (adiantamentos e pagamento de estadias);
4 – Preparação e submissão de declarações trimestrais de IVA, caso o volume de negócios anuais exceda o valor de €10.000,00;
5 – Preparação e submissão da declaração anual de rendimentos dos titulares da exploração (IRS ou IRC).