Flash News NA 17/04/2024

Payment of personal income tax by instalments in Portugal

You've just done your IRS simulation and found yourself with an amount to pay that exceeded your worst estimates. What should you do? Can you pay in instalments?

The answer is yes. Once you have been notified by the Tax Authority to pay your IRS, you can request a payment plan before tax enforcement proceedings are initiated after the voluntary payment period has elapsed.

How?

There are two ways to pay your IRS in instalments:

The first and most common is provided for in Decree-Law 150/2006 of 2 August and stipulates that the request for a payment plan must be made in person or electronically at the Tax Office of each taxpayer within 15 days of the expiry of the voluntary deadline for paying the tax. This request must be addressed to the Head of the Tax Office. To be accepted, the taxpayer must not have any debts to the Tax Authority.

In this modality, the taxpayer does not have to present a bank guarantee.

If the request is accepted by the Head of the Tax Office, the amount of tax will be divided into 12 instalments plus interest on arrears, which will be counted from the end of the IRS payment period. Please note that if you miss one of the instalments, this will result in the following instalments falling due and the initiation of tax enforcement proceedings for the amount still owed.

The second method is set out in articles 29 to 35 and article 36 of Decree-Law 492/88 of 30 December and basically answers the following question:

What if I need more than 12 instalments to pay my IRS?

The process is very similar to the previous one. The request for payment in instalments must also be submitted to the Tax Office, no later than 15 days after the deadline for voluntary payment of the IRS and must contain the identification of the applicant and the nature of the debt.

After this, the body of the Tax and Customs Authority with competence to assess and decide on the request for payment in instalments will vary according to the amount of tax.

The number of instalments cannot exceed 36.

It is also a requirement of the AT to request payment in instalments if there is proof of an economic situation that does not allow the taxpayer to settle the debt within the legal deadlines.

The other major difference with this type of instalment payment is that the taxpayer will have to present a bank guarantee, surety bond or mortgage in the process of applying for payment in instalments.

Again, if you miss one of the instalments, the following instalments will fall due and tax enforcement proceedings will be initiated for the amount still owed.

At Nominaurea we can help you with your request to pay your IRS in instalments, we look forward to hearing from you!