Likely demands for extra tax from previous years

For topics that are specific to Portugal, please go here.
teba18
Posts: 274
Joined: Thu Jan 31, 2008 6:11 pm
Location: Algarve
Contact:

Likely demands for extra tax from previous years

Post by teba18 »

We had an e-mail last week from our management company to say they've been advised that Financas are now intending to try to claw extra tax back from holiday rentals for the years 2011 - 2014, They're only going to allow expenses that were incurred during weeks that were actually let which is likely to mean substantial demands for additional tax for most owners.

They've spoken to a tax lawyer who says the law is very unclear and it wouldn't be possible to organise a class action against this because every case would be different. Costs for an individual would apparently be at least 3000 euros - and it seems even if an owner won, the Financas wouldn't be obliged to pay their legal fees!!

Has anyone else heard anything about this? The Portuguese government are definitely a law unto themselves!!
User avatar
kevsboredagain
Posts: 3207
Joined: Sat Jan 20, 2007 9:32 am
Location: France
Contact:

Post by kevsboredagain »

That rule is exactly how Spain works now for EU residents. It was forced upon them by the EU courts so it would suggest Portugal has identified what they could actually get away with and still be legal in the EU.
teba18
Posts: 274
Joined: Thu Jan 31, 2008 6:11 pm
Location: Algarve
Contact:

Post by teba18 »

I don't understand how it can be legal for any country to change the rules on what expenses are allowable and then apply those rules retrospectively so they can demand extra tax for years gone by when different rules applied. Is that what they've done in Spain?
User avatar
kevsboredagain
Posts: 3207
Joined: Sat Jan 20, 2007 9:32 am
Location: France
Contact:

Post by kevsboredagain »

teba18 wrote:I don't understand how it can be legal for any country to change the rules on what expenses are allowable and then apply those rules retrospectively so they can demand extra tax for years gone by when different rules applied. Is that what they've done in Spain?
Not with rental income but many owners in Spain were caught out when some regions deemed that the taxes they paid on purchase were not enough. They calculated the value of property at the time of purchase based on some whacky formula, without even seeing the property and then chased and fined people for back taxes.
RichardHenshall
Posts: 414
Joined: Sat Sep 05, 2009 4:06 pm
Location: Luz, Algarve

Post by RichardHenshall »

Is it really a change of the rules or an enforcement of the existing ones?

It's always been clear as mud what expenses were really allowed under the old Anexo F regime and many, when completing their Portuguese self-assessment returns, will have chosen the interpretation that seemed most favourable at the time.

At least there's clarity with the Anexo B simplified regime - no actual expenses are allowed! Our taxable profit is 15% of our turnover.
Post Reply