The e-fatura portal [link], designed to encourage invoice issuance and curb tax evasion, also unlocks tax incentives, known as deductions in Personal Income Tax (IRS). This guide elucidates the process of registering deductible expenses on the e-fatura portal, ensuring taxpayers benefit from eligible deductions from personal income tax (IRS).
What are tax deductions and e-fatura?
The e-fatura system facilitates the transmission of purchase data directly to the Tax and Customs Authority (AT), crucial for IRS personal deductions.
Deductions cover various categories of personal expenses such as health, education, housing, nursing homes, family expenses, and partial VAT refunds on specific services.
Deduction categories and weights
Categories like health, education, and housing carry different deduction weights.
Correct validation ensures taxpayers maximize deductions on expenses like transport passes, accommodation, restaurants, workshops, beauty salons, and veterinary services.
Invoice validation deadline
According to the IRS tax calendar, invoices must be validated by February 25 of the following year.
Timely validation ensures taxpayers have a comprehensive overview of expenses and allows corrections before the deadline.
How can taxpayers validate their invoices?
(1) Register with Tax Authority’s Portal: New users need to register on the Portal das Finanças. Access passwords are sent to the registered address.
(2) Access e-fatura: Visit the e-fatura homepage, navigate to "Despesas dedutíveis IRS," click on "Consumidor," and enter the Tax Authority’s portal password. The access can also be done through the Tax Authority’s portal.
(3) Verify accumulated expenses: Check accumulated expenses associated with the taxpayer’s tax number (NIF), categorized by sector.
(4) Validate outstanding invoices: If outstanding invoices exist, the portal notifies the taxpayer. Validate them by clicking on "Complementar Informação Faturas" or “Resolver Pendências.”
(5) Associate medical prescriptions: For health expenses with a 23% VAT rate, click on "Associar Receita." Indicate if a medical prescription is available along with the expense amount.
(6) Enter invoices manually: In case of missing invoices, manually enter them via "Faturas," "Registar Faturas," filling in essential details.
(7) Confirm validation: Regularly check e-fatura to ensure correct entry of invoices. Adhere to IRS deadlines for submission.
Self-employed workers
For self-employed workers, validate invoices indicating whether expenses are related to professional activity.
These designated business-related expenses must be essential to exercise their professional activity.
Portuguese business-related expenses can be considered upon VAT quarterly statements, granting freelancers the opportunity to have the VAT from these purchases reimbursed (input VAT).
Under the simplified regime, freelancers are required to provide proof of expenses to make up at least 15% of expenses related to the profession.
Validation is critical for self-employed workers with self-employment (category B) income to avoid losing potential VAT refunds.
By actively participating in the e-fatura system, taxpayers enhance their IRS deductions, ensuring accurate validation of invoices and adherence to submission deadlines. Self-employed workers, in particular, should meticulously validate professional expenses to optimize their entitled deductions and avoid financial losses. Regular monitoring and compliance with IRS guidelines are key to a successful e-fatura experience.
Frequently Asked Questions
How does e-fatura work in practical terms?
How does e-fatura work in practical terms?
When purchasing goods and services, in Portugal, e-fatura allows the direct transmission of purchase data to the Tax and Customs Authority (AT). Taxpayers confirm deductible categories on invoices through the portal, while the purchases’ invoices are automatically uploaded into this platform.
Are most invoices automatically validated by e-fatura?
Are most invoices automatically validated by e-fatura?
Yes, most invoices are automatically validated based on their sector. However, some invoices require manual validation, and taxpayers should be aware of the deadlines for this process.
What is the deadline for validating invoices on e-fatura?
What is the deadline for validating invoices on e-fatura?
Invoices on the e-fatura portal must be validated by February 25 each year according to the IRS tax calendar.
Can I consider personal deductions if I choose to be taxed under the NHR regime?
Can I consider personal deductions if I choose to be taxed under the NHR regime?
No, deductions cannot be considered in case of choosing to be taxed under the NHR (Non-Habitual Resident) regime.
Can self-employed workers lose money if invoices are not validated correctly?
Can self-employed workers lose money if invoices are not validated correctly?
Yes, incorrect validation may lead to the omission of deductible and refundable VAT, causing financial losses for self-employed workers with category B income.
What expenses are accepted as deductible for business activity?
What expenses are accepted as deductible for business activity?
Only expenses essential to exercise your business activity are accepted. Examples include computer/equipment costs, raw material acquisition, physical workplace expenditures (considering utility bills in ¼ for home office), maintenance, restoration, bank loans, and others. Restaurants, meals/groceries, and transportation costs are not considered essential for business activity and will not be accepted by the tax authorities.
Can expenses from EU suppliers be uploaded into the e-fatura system?
Can expenses from EU suppliers be uploaded into the e-fatura system?
No, expenses from the EU cannot be uploaded into the e-fatura system, exclusive to Portuguese expenses. They can only be considered for the annual tax return (IRS) and must include the tax identification number (NIF). In this case, keeping a scanned copy of the original invoices is highly recommended.
Are expenses outside the EU considered for any deductible purposes?
Are expenses outside the EU considered for any deductible purposes?
No, expenses outside the EU cannot be considered for any deductible purposes. They are not eligible for deduction in the annual tax return (IRS).
How often should taxpayers access e-fatura for validation?
How often should taxpayers access e-fatura for validation?
Taxpayers are advised to access e-fatura regularly to check the correct entry of invoices and adhere to IRS deadlines to ensure accurate deductions within the stipulated validity period.