Incorrect NIF status Portugal - HELP

We bought a a holiday house in Portugal about 10 years ago and used that address when we applied for our NIF. It seemed staightforward, they asked if we had a portuguese address and cLearly we were idiots because we were totally unaware that using the Portuguese address indicated that we would then be considered resident for tax purposes. We have only just this week (10 years later)realised our mistake. we have not declared any taxes or had any dealings with the tax authority in these 10 years but due to being in the process of obtaining a Golden Visa, this has now come up!!! Can you reverse a horrible mistake and change retro-actively change your tax status to non resident? HELP

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How do you mean “this has now come up”? Who advised that you had been a tax resident in Portugal for 10 years, and even then why this is an issue in the Golden Visa context?

To my knowledge, tax residency is not determined by merely having your PT address as your registered address on your NIF paper. You need a presence on the ground for at least 183 days per year, or else officially registered as an Non-habitual resident.
Are you saying that you actually resided in Portugal for 183 days each year in the last 10 years?

No, we have been travelling to and from Portugal and elsewhere is Europe. But apparently we were supposed to use our UK address not the property address in Portugal. We have been told by a Lisbon Tax attorney that we should have had a Portuguese representative acting as a go between and registered for the NIF using UK address and that we could now be liable for tax on our UK business and personally! So we are in a total panic!

Ok, but can you simply access your Portal das Financas and see for yourself your status and if you have any debts? All you need for GV is the no-debt declaration, which is normally obtained directly from the Portal as PDF.

I agree you should have had a PT-based tax rep, but since July 2022 this can be waived.
The main question is really if you have accumulated any debt or not, e.g. I hope you duly paid your IMI tax annually?

Sorry, what is IMI tax?

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IMI = Imposto Municipal sobre Imóveis – Municipal Property Tax.
An equivalent to the UK Council Tax.

Should you have had a PT tax rep, they’d scan the IMI bills and forward to you.
As you did not have your PT tax rep, you must have had proactively logged into the Portal das Financas to see your IMI bills and pay them.

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Oh yes, all paid and there is no debt recorded on the Portal so obtaining the no debt declaration is fine, but our concern is not so much the Golden Visa but the potential tax implications from having incorrectly addressed our original NIF application. The tax attorney has told us this is a huge problem. But we don’t know how or when we will know if they will assess us on our UK incomes?

What’s your GV status? If you already hold your GV there is no problem.
If you are applying, you should ask your GV lawyer in PT if there is any problem.
I honestly don’t see any problem at all here, but I am not a lawyer.

Well, you have checked it yourself - there is no debt on the Portal.
At what point do you expect the PT authority to suddenly ‘assess your UK incomes’ and apply PT tax? Apparently they have not done this for 10 years, so what’s the cause for trouble now? I don’t quite understand the logic of your tax attorney.

As with a lot of others at the moment, waiting for Biometrics LOL. We are seeing our GV lawyer this afternoon to discuss this, but the fact that he has only just noticed this (our) error even though he has access to the portal for the past 2 years and has a copy of our NIF paperwork, doesn’t fill me full of faith. The GV lawyer is not the most helpfull. It was only picked up when we went to see a tax consultant yesterday to discuss how we move forward with being paid dividends etc once we get our GV that he noticed the NIF address. So we were just wondering if anyone else has ever been in a similar situation and had experience trying to change the tax status back without years of court cases and legal soup? Which is what we have been told to expect.

The only responsible advice here is to tell you to see a qualified tax attorney in Portugal. Would suggest not even a normal accountant at this point.

As an anecdote, friends of friends were in a similar situation only it was the tax authorities who noticed first and issued very large tax bills. It was very messy.

Yes, that what we were told too. Apparently if you put a Portuguese address on the NIF it defaults that you are registering for tax in Portugal even if you tick the correct boxes. The tax consultant in Lisbon is a top Tax attorney which is why it was so alarming because even he said this was a huge problem but you can never tell if it is a lead in to justifying outrageous legal fees LOL.

You will never get reliable tax advice on the internet

I assume this relates to tax residency and whether you arel iable to Portugese income tax. Nothing to do with property tax which is payable by the owner of property wherever they live

If you have a habitual residence in Portugal you are tax resident. It isnt I suspect just what you put on the form but more whether the Portugese property is an incidental holiday home or a residence. And it seems from your posts it is the latter and you were not protected by the golden visa. Your relationship with your UK address may help if for example you live 50 weeks a year in the UK property and only visit the Portugese property on holiday, but if your UK property is rarely used then the question of habitual domicile (not tax domicile) means you only have Portugal as a base

Best option is usually to declare and pay.

As I have posted so many times, the main issue for tax is tax residency and the criteria vary from country to country. It is possible to be world non resident but you have to take professional advice and be aware that your behaviour in country A may effect your tax position in country B

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Exactly, the tax residency determination is a whole procedure in itself, which is specific to each country as defined by their Tax Authority. Merely having your PT address on your NIF does not by itself determine your tax residency as far as I can tell from my limited tax knowledge. The original poster would need to go through the process of determining their tax residency in both PT and UK.

Many thanks for the responses to my post.
We are definately not resident as far as how long we stay etc but was concerned as to whether the tax status could be changed as it incorrectly states ‘Nao’ to the question of ‘are we NHR?’. We are taking advice from a suposedly top tax lawyer in Lisbon, but I am always concerned that we are at their mercy as we have been told that this is a serious problem and I don’t know if that is true or just justifying big bills? I just wondered if anyone else had been in a similar situation (needing to clarify or change the NHR status) and knew whether changing it was straight forward or a long drawn out complicated, expensive thing?

why do you consider that the NHR status is showing incorrectly for you? Are you saying you formally applied to become NHR some years ago? Was this request granted at that time?
If you never applied then you are correctly not an NHR.
But if you neither ‘Resident’ nor ‘NHR’ for the PT tax purposes, what is the remaining concern?

We applied for a fiscal number at our local tax office around 10 years ago in order to open a bank account. Our portugueses tax accountant last week noticed on the form that the box saying NHR yes or no was marked NO.
Apparently this means we have been registered as resident for tax purposes and although this has so far not been an issue, apparently the tax authority in Portugal could assess for our UK income and Business tax for that period of time. They havent yet! But only because nothing as triggered it. So we are trying to find out if it can be corrected without fuss. Our tax attorney in Portugal says it is a big problem - thats all I know and just wanted to know if anyone else has been in a similar situation and whether it is in fact a big thing to get it changed or not? I would rather try and correct now before it does become an issue than wait for the tax authority to notice. But as I have said before, I am concerned as to whether this is as big an issue as my tax attorney claims or whether it is a straightforward visit to the tax office and ask them to correct it?

Ok, understood.
Basically your concern is that you may be considered a Tax Resident in Portugal since your initial NIF registration about 10 years ago.
I suggest you read the below KPMG guidance, as well as the UK/PT double taxation treaty. This should help you determine your own tax residency status, and you then will be able to have a meaningful conversation with your PT-based tax advisor.

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Particularly in your case you may want to check this condition:

" * spent less than 183 days herein, they have, at any time of the referred 12-month period, accommodation available in the country/jurisdiction in conditions where it can be assumed that it is their intention to use it as a place of habitual residence or abode."

When you purchased your PT property, you must have paid your IMT+IS taxes, where you elected to either declare this as your primary (=habutal = less tax) or secondary (=non-habitual= more tax) residence.
This should be in your property purchase records.

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