Portugal's tax season brings stricter checks and unexpected bills for many
Tax season is underway in Portugal, with all taxpayers able to access their final deductions page since 15 March. This year, the Tax Authority warns of stricter checks, particularly on undeclared reinvestments in primary residences. Some individuals now face repayment demands running into tens of thousands of euros.
Experts also predict changes in refunds, with many taxpayers likely to receive less—or even owe money—due to last summer's advance payments. The final deductions page plays a key role in preparing pre-filled tax returns. Before submitting, taxpayers should check for missing receipts or errors that could lead to penalties. Those who reinvested sale proceeds into a new main home but failed to declare it have already been hit with large repayment demands.
For Portuguese citizens who lived abroad and receive foreign pensions, filing Annex J is mandatory. While no official figures exist, some have received unexpected additional payments in recent years after correctly submitting this form. Meanwhile, low earners are advised to simulate including interest from savings or rental income to reclaim withholding tax.
Taxpayers under 26 earning less than €8,500 may benefit from staying on their parents' return. However, the Young Taxpayer Benefit—available to those up to 35 for their first decade of work—requires filing separately. Couples should also compare joint versus separate filings to maximise savings.
Other tips include moving rehabilitation and education costs to line 606 and listing life insurance premiums on line 605 for higher deductions. Additionally, inherited property sold before estate division avoids capital gains tax.
The Order of Certified Accountants warns that refunds may shrink this year. Many who received advance payments in 2023 could now face unexpected bills. The Tax Authority's stricter checks mean accuracy is more important than ever. Missing declarations, incorrect deductions, or overlooked annexes could lead to costly repayments. Taxpayers are urged to review their returns carefully before the deadline to avoid surprises. Those with foreign pensions, low incomes, or inherited property should pay special attention to the new rules.
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