Taxpayers who in 2024 had capital income, such as interest, and income not subject to IRS, such as daily allowances or meal allowances, worth more than 500 euros will have to declare it to the IRS.
This reporting obligation is contained in an amendment to the IRS code, introduced by the State Budget law for 2024 (OE2024), and aims, not pay any additional taxbut to bring to the annual IRS declaration a more general picture of the income obtained by taxpayers, making it easier to read those who are eligible for the granting of support that depends on income – as happens, for example, with income support.
To Lusa, Lourenço Gouveia Fernandes, from the law firm PARES, emphasizes this, stating that the reporting of these income will serve, “from the outset, for the Tax Authority to collect elements, namely, for the purposes of the mechanism envisaged for the taxation of manifestations of fortune and other unjustified asset increases, provided for in article 89-A of the General Tax Law [manifestação de fortuna]”.
To the article of the IRS code that determines that taxpayers must submit, annually, “an official model declaration, relating to all sources of income from the previous year and other information elements relevant to their specific tax situation (…]”, a number was added providing that, for this purpose, “are mandatory reportednamely, income subject to exemption taxes not included and income not subject to IRS, when greater than 500 (euro), as well as assets held in countries, territories or regions with a clearly more favorable tax regime”.
Despite considering that the wording of the rule is not entirely clear, and that it still needs to be clarified by the AT or in the instructions of Model 3 (annual IRS declaration), the inspectors consulted by Lusa believe that the minimum limit of 500 euros applies to each of the income types individually.
This will mean that a person who in 2024 had 450 euros in interest (from deposits or savings certificates, for example) will not have to fill in this field, but if they had 600 euros they will already have.
However, in the category of income not subject to IRS, the universe of taxpayers required to report will be larger.
At issue are, as Samuel Fernandes de Almeida, from MFA Legal, points out, the meal allowance within the legal limits, or non-subject income in kind, as is the case, for example, of allocation of vehicle to the worker without written agreement. Subsistence allowances are also income not subject to IRS.
Taking into account that the limit of the meal allowance not subject to taxation is six euros, when paid in cash, Luís Leon, from the consultancy Ilya, states that this will mean that the majority of workers who receive this allowance will have to report it to the IRS . Because, even though they have a lower daily value, they will easily exceed 500 euros.
In parallel to the scope, they cite the difficulty that taxpayers will have in carrying out this declaratory obligation (especially in the case of interest), which, believes Samuel Fernandes de Almeida, “will be a additional factor of complexity and bureaucracy” intended to cross-reference elements that the Federal Revenue Service somehow has in its possession – since banks are already obliged to report and deliver to the Federal Revenue Service the amounts they retain as clearance fees.
“In terms of the feasibility of this standard, our biggest concern is related to its possible attempt to application to non-resident citizens and nationals of a European Union country who are obliged to submit a IRS declaration in Portugal, for whom this obligation may result in a disproportionate effort,” says, in turn, Lourenço Gouveia Fernandes.
Luís Leon highlights the case of interest, noting that, as its payment is subject to a release fee (which is ‘charged’ by the bank or entity paying these income when they ‘fall’ into the customer’s account), most people You will have no idea how much you received throughout the year.
One of the ways for taxpayers to know the exact amount they received in interest is to ask the bank for a statement.
Lusa questioned the largest banks operating in the national market about the availability of this type of declaration and possible costs, with an official source from the public bank stating that “Caixa Geral de Depósitos makes the declaration available to its customers, without associated costs”.
Millennium BCP also said that the OE2024 measures mentioned do not imply changes to the tax declarations that the bank already makes available to customers. “In case a client wishes to access their income tax declaration, they can always request the declaration of capital poolsat no cost”, he added.
Lusa is still awaiting responses from the remaining banks.
Lourenço Gouveia Fernandes recalls, on the other hand, that this reporting obligation does not imply any additional payment of IRS because it is income or that have already paid tax (via clearance fee) or are not subject to taxation (in the case of daily allowances or meal allowances within legal limits.
“This is a reporting obligation and, despite now being declared, this income should not be subject to additional taxation”, explained the lawyer, adding that the regime may end up having “little applicability”, as its purpose “seems to be, essentially, , to allow better control of situations involving manifestations of wealth and other unjustified asset increases”, with the risk that AT “does not have the technical and human resources to carry out this verification in relation to all IRS declarations submitted”.
This change in the IRS Code also requires the declaration of assets held in so-called ‘offshores’. In this case, Lourenço Gouveia Fernandes understands that the measure aims to “provide AT with more information that could be useful in the combating tax evasion and application of anti-abuse standards, as well as reversing the burden of proof in case of omission”.
This new reporting obligation will have to be reflected in the ordinance that approves the IRS annual declaration models – which must be published every year.
Lusa asked the Ministry of Finance whether the values in question will be pre-filled in the IRS declaration, and it is up to taxpayers to validate them or not (as they do with the value relating to income from work, rent or pensions), but received no response.
