There are numerous bureaucratic, tax and accounting processes that a company must comply with. Despite the easy access to information, sometimes these tax obligations vary from company to company or the from the type of activity they perform.
If you are thinking about opening a business in Portugal and feel that you can’t master 100% of all the obligations of a company, do not hesitate to contact professionals willing to help you.
Starting a company implies complying with a set of tax and declarative obligations, which if not fulfilled may become a serious problem for the company in question. These are some that you should take into consideration:
Corporate Income Tax (IRC)
All companies that earn income in Portugal are subject to Corporate Income Tax, or IRC. That is, companies with activities of a commercial, industrial or agricultural nature have to pay this tax. IRC applies:
- To the profit of companies headquartered in Portugal, with deduction of any losses or tax benefits.
- To the sum of the income of companies headquartered in Portugal, whose main activity is not commercial, industrial or agricultural.
- To establishments in income in Portugal, but don’t have their head office in the country.
- – The sum of the income obtained in Portugal by companies without any type of establishment in the country.
Regarding the deadlines for declaring the IRC, every year your company must submit it on the Finance Portal until May 31. However, there are other deadlines that you should take into account, depending on the type of activity your company performs.
Value Added Tax (VAT)
Value Added Tax is one of the most important taxes and obligations for a company. Companies that are not exempt from VAT deal with this tax in a particular way. When they sell a product or provide a service, they charge a VAT amount to their customers. However, this amount, known as output VAT, is not handed over to the state immediately. Instead, your company will be able to deduct the VAT on your purchases or services purchased and deduct it from the amount you have to hand over to the State.
In summary, the amount you will hand over to the State is the difference between the assessed VAT and the deductible VAT. And don’t forget: the periodic VAT return can be monthly or quarterly. You should consult a professional in the area to help you in these procedures so important for your business.
Single Social Tax (TSU)
Applied to all companies where there are employees, the Single Social TAX is the rate applied to employees’ salaries. So the company has to charge Social Security for all the contributions associated with the workers’ salaries.
In other words, normally 23.75% of each employee’s gross wage is the employer’s percentage charge that must be contributed to Social Security. In addition to the Social Security contributions, a withholding of 11% is also due on the salaries of the employees, this rate called contributions is also an obligation of the company, which must withhold and subsequently hand over to Social Security, along with other amounts.
Now that you are aware of some of the tax obligations that you have to fulfill as a business owner, remember that there is always someone who can help you in the management of your business.
The submission of this information must be made by the 10th of each month, and the payment of contributions and dues must be made by the 20th of each month.
With Ivoconta, your company’s accounting and taxation will always be in order because we ensure that all your obligations are fulfilled within the established deadlines.