We offer the following services:
- Book-keeping
- Preparation and submission of VAT returns
- Preparation of accounts
- Completion and filing of online company tax returns
- Tax advice for small/medium sized businesses and individuals
- Resident and non-resident tax advice
- Registration of new businesses for tax and VAT
BUSINESS SET UP
In Portugal you can set up the following kinds of businesses
- Limited Company either Private or Public
- Partnership
- Sole Trader
All businesses have a legal requirement to keep full and complete books and records.
LIMITED COMPANIES
All Limited Companies must file accounts once a year with Companies House and the Portuguese Tax Authorities. This must be done between the months of May (filing of tax returns) and September (filing of accounts). These should be prepared by a Registered Accounting Firm. An Audit will not be required unless you meet 2 of the following 3 levels for 2 consecutive years: a) turnover greater than € 3,000,000; b) balance greater than € 1,500,000; c) average of more than 50 employees.
PARTNERSHIP
This can be between two or more individuals or companies but you do not have limited liability
SOLE TRADER
This is when you trade as an individual
MAIN TAXES IN PORTUGAL
In Portugal there are two main forms of tax:
- Corporate Tax
- Personal Income Tax
Madeira is an excellent jurisdiction with reduced Corporate Tax and VAT rates and benefits from the fact it is an onshore territory.
CORPORATION TAX
This is based on the profits of the business
The rates to the 31st of March 2011 are as follows :-
Taxable profits up to € 12,500 taxed at 12.5%, Taxable profits over € 12,500 taxed at 25%
Council Tax also applies, although the rates depend on the municipality the company has its registered office in. For instance, Lisbon has a normal rate of 1.5%, and a reduced rate of 0.75% for companies whose turnover did not exceed € 150,000.
VAT
All Portuguese businesses must charge customers VAT on the sale of all goods and services at a rate of 23%.
VAT Rules are very complex and must be discussed with an Accountant before a business commences.
PERSONAL INCOME TAX
MADEIRA
The present regime of tax benefits allows the incorporation of new entities within the scope of the IBC of Madeira until December 2013, granting significantly reduced Corporate Tax rates until 2020.
APPLICABLE RATE TAX YEARS
4% From 2010 to 2012
5% From 2013 to 2020
The reduced corporate tax rates are only applicable to profits derived from operations exclusively carried out with non-resident entities or with other companies operating within the ambit of the IBC of Madeira. There are no restrictions, nevertheless, on the development of business activities with Portuguese companies, and profits deriving from such operations will be taxed at the normal Corporate Tax rate in Madeira, 20% from 2008 onwards.
Enquire About Our Accountacy & Tax Services
For further information, please contact us on +44 (0)208 421 7474 or fill in the form below: