Obligations of Companies in Portugal

Companies in Portugal are obliged to comply with various tax, legal, accounting, and contributory requirements.

Compliance with all these obligations is vital for the legal and financial operation of a company in Portugal, ensuring compliance with current legislation and avoiding penalties.

Below are some of the obligations of companies in Portugal. 

Tax and Social Security Obligations for Companies in Portugal

Companies in Portugal are required to comply with various tax and contributory obligations, including paying taxes and social security contributions. 

Fiscal Calendar in Portugal

The fiscal year is generally the same as the calendar year. However, Portuguese companies can change their fiscal year by notifying the Tax and Customs Authority (AT), provided they satisfy certain requirements. 

Companies in Portugal must make Payments on Account and Additional Payments on Account in July, September and until 15 December. 

VAT returns must be filled out regularly and submitted to the Portuguese Tax Authority.

Deadlines for submitting quarterly VAT returns by companies in Portugal: 

• 20 May; 
• 20 August; 
• 20 November; 
• 20 February of the following year.

Deadlines for submitting monthly VAT returns (for Portuguese companies with a turnover of more than €650,000.00). 

• Up until the 20th day of the 2nd month that follows the month of the operations (e.g., the May return must be submitted by 20 July).

The Monthly Stamp Duty Declaration must be submitted by the 20th of the month following the month in which the tax liability arose.

Social Security – Payroll Tax (TSU)

Social Security is a public scheme that guarantees social welfare to all those who work or reside in Portuguese territory. 

Any worker, manager or administrator of a company in Portugal (whether residing in Portuguese territory or not) is obliged to register with the local Social Security Office and contribute part of their salary to the Portuguese Social Security system. 

Social Security contributions are made by paying the Payroll Tax (TSU).

This contribution obligation corresponds to 34.75% of the respective salary (23.75% paid by the Portuguese company and 11% deducted from the employee). There are reductions in these rates for specific cases.

Monthly Social Security contributions must be declared up until the 10th of the month and paid no later than the 20th, always during the month that follows the month they pertain to.

The Monthly Declaration of Wages pertaining to income from employment and respective withholding tax and Social Security must be submitted no later than the 10th day of the month that follows the month of the income.

Accounting Obligations in Portugal

The accounting obligations of companies in Portugal relate to the need to keep their accounts up to date and in line with current accounting standards.

All transactions by Portuguese companies must be duly reflected in the accounts and supported by original documents.

A Portuguese company’s accounts cannot be more than 90 days late, which means that any transaction carried out by a company must be accounted for within that time period.

Income subject to Corporate Income Tax is communicated to the Tax Authority via the Modelo 22 Income Tax Return form. The previous year's return must be submitted no later than 31 May of the current year. 

The Simplified Corporate Information (SCI) is a declaration that brings together various accounting and tax information. The previous year's SCI must be submitted no later than 15 July of the current year.

In most cases, a company's accounts must be approved by the shareholders by 31 March. Pure holding companies (SGPS) must have their accounts approved no later than 31 May.

Invoices must be dated, numbered sequentially, and contain the following information:

• The names or corporate names and head office or domicile of the supplier of goods or services, and of the recipient or purchaser, and the corresponding tax numbers;
   
• The quantity and usual name of the transferred goods or services provided, specifying the necessary information for calculating the applicable rate; packages that have not been transacted must be identified separately and contain express mention that their return was agreed;
   
• The price, net of taxes, and all other information included in the taxable amount;
   
• Applicable rates and the amount of tax payable;
   
• The reason for not applying the tax, if that is the case;
   
• The date when the goods were made available to the purchaser, when the services were provided and when payments were made before the operations were performed, if such a date does not coincide with the date when the invoice was issued.

As a rule, companies in Portugal must issue invoices within a period of 5 days from the date the goods and services are supplied. 

Portuguese companies are obliged to use invoicing software duly certified by the Portuguese Tax Authority (TA).  

The data must be transmitted to the TA (even if no invoices have been issued) by exporting the SAF-T invoicing file no later than the 5th of the following month.

Legal Obligations of Companies in Portugal

Companies in Portugal must comply with a number of legal obligations, including the following.

Obligation to Use Bank Accounts

All activities of Portuguese companies must be stated in one or more bank accounts exclusively allocated to the activity that is carried out. All transactions related to injection of capital, loans or advances from shareholders shall be made via these accounts, along with any other capital contributions or withdrawals.

Companies in Portugal must pay invoices or equivalent documents with a value of more than €1,000 using a means of payment that allows the recipient to be identified, namely cheques or bank transfers.

Portuguese banks shall always request a copy of the supporting documents for transactions involving amounts that exceed €12,500.

Central Registry of Effective Beneficiaries

Compliance with the legal obligations related to the Central Registry of Effective Beneficiaries (CREB) is an essential requirement for companies in Portugal. The purpose of this compulsory registration is to identify those who exercise control or ownership over a company, whether directly, indirectly or through third parties.

This obligation is in line with Directive 2015/849 of the European Parliament and of the Council of the European Union, incorporated into the Portuguese legal framework. It aims to strengthen transparency and security in national and international transactions between companies operating in Portuguese territory. 

Thus, all companies in Portugal are obliged to identify and register the effective beneficiary, as established by the submission of a declaration that includes information regarding their identity.

This Registration must be made within 30 days of the company's commercial registration.

General Data Protection Regulation

Companies in Portugal must comply with the GDPR guidelines when collecting and managing consumer data, guaranteeing transparency, security, and compliance with retention periods. The appointment of a Data Protection Officer may be mandatory in certain cases.

Licensing

All companies in Portugal that carry out industrial activities need to be licensed, not just to ensure the protection of public health, health and safety at work, and the safety of people and property, but also to guarantee correct planning of the territory and protection and defense of the environment through the prevention and reduction of harmful pollution.

Licensing commercial establishments is, as a general rule, the exclusive responsibility of the local administration (city councils, parish councils, and other local authorities).