NIF: If no longer needed, must I still pay for fiscal representative and/or file taxes forever?

Hi,
We are newbies on this board and have been getting great info from this community. Thanks!

We are US citizens and are considering applying for the Portuguese Golden Visa, hence the need to apply for NIF and bank account. We understand we need these 2 things in hand, so that we can immediately make an offer if we find the right property.

HOWEVER, we may end up NOT finding a suitable property to purchase, and therefore, decide NOT to apply for the Golden Visa at all. Have questions as to whether the NIF will become a liability should we abandon GV plans.

  1. Once we get the NIF, are we forever obligated to have a fiscal representative even if we end up not buying any property or having any presence in PT?

  2. Are we also obligated to file taxes once we have the NIF?

  3. If we don’t buy any property, and don’t get GV, BUT we keep just the bank account open (with a tiny deposit)… do we need a fiscal rep, or need to file taxes forever?

We will not be residing in PT at all, in all the above cases.

Have been searching in vain for answers, so hope the many well-informed members here can help out. Thanks!

Hello @miss.scribbles,

First, welcome to this site. I am sure you will find a wealth of information here, though I must admit your questions are most unusual.

Second, the key question is: why are you considering the Golden Visa in the first place? It is a substantial commitment of money, time, effort, and for many here - emotion. You are claiming to have no interest of living in Portugal at all, and so why bother looking for a property there?

Portuguese GV is one of the better programmes as it allows many to have a path to European residency and citizenship whilst spending rather nominal amount of time in the country (only minimum of 35 days over five years), which allows you to apply in parallel with your existing living arrangement. For many here, this is still a major life decision predicated on their perceived need to change their life plans such as retiring or having an option for themselves and/or their children to live, study, and/or work in Europe. Especially if you are coming from the U.S. (as I am), there is probably no real need for you to re-locate unless you are attracted by a different lifestyle that Europe offers or contemplating other changes in your U.S. life routine.

Most participants of this forum are seeking either to start a new chapter in life or have an option to do so in the future. In light of this, we are willing to commit hundreds of thousands of dollars to pursue our goals. A typical cost of NIF application is about 200 € (assuming that you need a lawyer to help with the application) and a cost of annual fiscal representation in Portugal is about 1000 € which includes filing basic Portuguese tax returns. These are trivial expenses when compared to the overall investment we make into the pursuit of our interests to have an option to live in Portugal and for that matter - Europe. I can’t speak for everyone, but for me it is hardly a consideration.

If you live in Portugal, you will need a NIF for everything. If you decide you need to keep an account in Portuguese bank, you will need a NIF. If you decide you no longer want to live or have any other ties to Portugal, to the best of my knowledge, you can inform your fiscal representative of your decision and “surrender” your NIF number to the local authorities.

BTW, if you open an account in PT, the U.S. will certainly want to know about it (on-line form NFFBAR).

If you do decide to “try out” Portugal, consider D7 visa instead (you will need a NIF at that point). It allows you a long-term stay without a need to buy a real estate or invest in a fund. Should you then decide this country is for you, then start looking into GV investments for a more permanent arrangement.

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Thanks @PCERoman for your response. All the GV benefits you listed are precisely why we are considering applying for it. We are making an exploratory trip to PT to look at real estate soon, and have been told we should have both NIF and bank account in hand in order to be able to make offers / pay deposit on real estate.

For various reasons, there is however a chance we may not end up going through with the application. I have read there may be no way to surrender or cancel the NIF, and that we may end up having to pay for fiscal representation forever more.

Sure, we could wait till we find a property/are sure about applying before getting the NIF, but we would not be able to jump on a property should we fall in love with one.

Therefore I was hoping that someone has had experience with this, or have a definitive answer one way or another.

Thanks for weighing in!

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Hi @miss.scribbles,
you don’t exactly need your NIF to ‘jump on a property’.
I for instance did not have mine when I was searching for (and found) a property myself. Neither did I have a PT bank account.
Normally what happens is that you are expected to make an offer in writing and supply a fairly small amount as a deposit around 2-3k EUR. You are then expected to do your conveyancing due diligence within reasonable time and sign a promissory purchase contract (“contrato de promesa de compra e venda = CPCV”) with which you’d pay a more substantial deposit of about 10% or more. At that point you’d need your NIF and Portuguese bank account ready.

By the way, it so happened that I did not even pay the initial ‘offer deposit’, going straight into the CPCV after my conveyancing.

Depending on which firm you may use, you’d get your NIF in 10 to 21 working days. Not sure about the bank account opening as it depends on your country of residence. I was able to open mine within 1 day (!) as I live near a very big city where some PT banks have their overseas branches.
Hope this helps.

Also, to add to Tommy Gunn’s argument above:

In pre-COVID time, obtaining a NIF was a rather quick process, performed practically over-the-counter in a Loja do Cidadão (citizen’s lodge). If you are in Portugal and have found a property you like, this is something you could do whilst there. With NIF in hand, you can also open a bank account in one day. You should, however, bring along your proof of address in the U.S. (like your most recent bank statement or an official bill), your SSN cards, along with your passports, of course. My bank (Novo Banco) required those additional documents to prove the official U.S. residency and tax status.

In the post-COVID environment, the timelines might be a bit longer, but still this is something you can do quite rapidly whilst in Portugal, much quicker if you are trying to accomplish the same remotely.

Bear in mind that although Portuguese RE market is currently quite brisk, it is nowhere near the current red-hot U.S. market like in some areas (CA, AZ and NV to name a few). You don’t exactly have to “pounce” the property of your choice, and you frequently have a good chance to negotiate a more favourable price, especially if you are looking in “low density” areas that would now qualify you for the Golden Visa.

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Hi.
To add to the comments above:
Portuguese Tax numbers are forever. If you live in a country outside the EU you will need to have a tax representative (a person or a company that lives in Portuguese territory). You can cancel your tax representation when you become a EU or a Portuguese resident - you will have to prove it with a utility bill or your Portuguese residence permit card, or other document with your address mentioned. But I have knowledge of inferior costs for the tax representation: not 1000€/year, but only 300€/year, with no filling of tax returns, because you only pay taxes in Portugal if you start to be a tax resident (live in Portugal for more than 183 days/year) or if you make profits with your portuguese property.
Please note that with a Golden Visa you won’t need to live in Portugal - you only have to stay in portugal 7 days in the first year, and 14 days in each of the following 2 years - and with a D7 visa (you can aply for it in a Portuguese Consulate if you have sufficient incomes) you have to live here. You can ask for your NIF in person (Loja do cidadão or tax authorities offices) but you will need to present the authorization of your tax representative.

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Thanks so much to everyone who’s helped clarify this issue! Due to your feedback, I will hold off on getting my NIF till I get there.

Once I determine there is a property that is right for me, I intend to apply for the NIF using NIFonline.pt. Has anyone used them successfully? Their prices are so much lower than other companies, I hope they are legit?

I am hoping to buy the property in Madeira, but by the time I get the NIF online (after I have found the property), I may already be in mainland PT before I can start a bank account. Is it ok for my GV property to be in Madeira but my bank branch to be in mainland PT?

@maria.caetano You stated: “You can ask for your NIF in person (Loja do cidadão or tax authorities offices) but you will need to present the authorization of your tax representative.” – Does this mean that the tax rep does not have to actually accompany me to the tax office, but merely give me a letter to bring along to the office? Does the letter have to state or certify certain facts? I am planning to get my NIF in Madeira.

Thanks again to everyone for your help!!

@miss.scribbles, either you present his written authorization or he goes with you in person. The authorization must state: I, , resident at___, passport nº_______ ,(marital status)_______,hereby authorize __________ , tax number _____, to appoint me as his tax representative in Portugal; And I authorize you to proceed with my registration in the tax register in that capacity - as Tax Representative. (in Portuguese, or in both languages).

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I obtained my NIF via NIFonline.pt last year and renewed with them this year. Everything is ok so far.

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I used NIFonline three times with no issues.
You don’t need to worry about any letters, just pay the fee to NIFonline and follow instructions, it is a fully remote process for the applicant.

Your bank can be anywhere in Portugal.
But also you can choose the branch in Madeira to be your ‘local branch’ if you wish, even if you physically open your account in Lisbon or elsewhere.

Remember that all your purchase transactions must be routed through your PT bank.

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So grateful to everyone for your invaluable info!!!

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Based on the initial question, during the Golden Visa process of visiting 7 days a year, do you need to file Portuguese taxes?

It is my understanding from my lawyer that if you are not in Portugal enough time to be a tax resident do not have any Portuguese sourced income (like rental property in Portugal) then you do not need to file Portuguese taxes.

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Thanks. I asked my attorney (and did. It get charged). If no Portuguese income or residency, we do not need to file. She was unsure about the FBAR so did that.

It seems from this circular that we longer need fiscal representative if we reside outside EU.

If this is true. Then we do not need to designate a representative and also don’t have the yearly representation fee.

Is my understanding correct ?

The tax law amended 6 June 2022, now only requires the appointment of a tax representative domiciled in Portugal when it is necessary to assist in the fulfilment of tax obligations by taxpayers residing in a third country (domestic and foreign not in the EU) and ensure the necessary contact between the Portugal tax authorities and the taxpayer.
Having a fiscal representative resident in Portugal is obligatory when the person is the owner of a vehicle and/or a property on Portuguese territory, or when the person works on Portuguese territory (whether for a third party, or as self-employed). The obligation for local fiscal representation is optional if the person resides in the EU/EEA.
Exemption from the obligation to have a locally resident tax representative occurs when the person is (i) not a tax resident in Portugal or EU or EEA; (ii) does not fulfil any legal requirements of having a Portugal tax status; (iii) is not subject to taxes in Portugal; (iv) has no tax obligations nor intends to have any tax obligations in Portugal. Information from the source (Portuguese Fiscal Authority- Autoridade Tributária e Aduaneira) is at: https://www.apeca.pt/docs/informacaoapeca/oc_90054_2022.pdf
I have seen statements that the obligation for local fiscal representative only exists during the period in which the person continues to own the vehicle/property and/or works in Portugal. After sale and/or ceasing to work in Portugal and fulfilling all tax obligations, the obligation for local fiscal representation ceases. Nomeação de representante fiscal deixa de ser obrigatória para quem não tem obrigações fiscais em Portugal – ECO. This makes sense, but I have been unable to find the source of this information.

So the answer for you depends on whether you have (or have acquired) tax obligations in Portugal, or not. If yes, the Portuguese fisc need to be able to be in touch with you through your local representative.

Thanks for the further clarifications, but I am still quite confused.
Previously, the tax authority corresponded with me via my PT-based tax rep through the post.
Now that I have opted-in for the electronic correspondence via Portal das Financas - why is the local tax rep needed? Do they mean to say that they will still send everything through the post to the tax rep as well as on the Portal das Financas directly to me? So they still want to have the tax rep as a ‘backup’?

Anyway, we’ll see after Sep 1st when the portal notifications take effect.

I cannot answer the question on why they want a local rep. I strongly suspect it may have to do with prior experience and has evolved into a requirement over time. Some people with tax liabilities can disappear without trace. Whereas a locally resident representative (although not liable for your taxes), is your passive representative, and more easily contactable.

Hi All,

This is true. My lawyer is apparently charging Euro 1.5k for tax filing even though I have not yet owned a property i.e GV is in process and have not got a title deed. Do I need to pay the lawyer any fees? I do not reside in Portugal. He is charging me only for representation? Have you all challenged the lawyer. Is there a way to file this on your own?

Pat, I don’t think you need to do any tax filing in PT if you are not receiving a PT-based income.
Here’s some details:

E.g. I own a property now in PT and I have a tax rep to whom I pay around EUR70 per year. They do not file taxes for me as there is nothing to file (I do not rent the property out). The PT Tax Authority sends me bills periodically now to pay IMI, which I then pay via online banking. I intend to set up a direct debit for IMI later.
The IMI bills are sent through the post to my tax rep who then scans and forwards to me. I expect from Sep 1st 2022 I will start receiving the tax bills directly on Portal das Financas.
Hope this helps.