Throughout 2024, invoices for various goods/services requested by each taxpayer using their tax identification number (NIF) have been or should have been reported to the Tax Authority (AT) based on the CAE (Economic Activity Code) of the entity that issued the invoice. However, their registration is not always properly categorized under the correct deduction item.

According to the legislation in force, these expenses can only be automatically considered deductible in the IRS if they are previously validated in the E-Fatura system, with a deadline of February 25, 2025. Therefore, you should validate and/or register these invoices through the AT portal under “Citizens – E-Fatura: Invoices/Consumer/Complement Invoice Information.” You must check whether the invoices are recorded under the correct activity and categorize those that are not assigned to any category (Other).

If you have an open self-employment activity, expenses related to the activity or those for which VAT has been deducted must be identified as belonging to the activity (selecting “Yes”), and you must also indicate whether they are fully or partially related to the activity. Expenses outside the scope of professional activity should be identified as not belonging to the activity (selecting “No”).

Note: It is possible to manually enter expenses related to professional activity, healthcare, training and education, real estate, and nursing home costs in the IRS Model 3 form to be submitted by taxpayers. This disregards the information communicated through the E-Fatura portal, without prejudice to the obligation to provide proof of these expenses.

Taxpayers are required to file and keep in good order all books, records, and supporting documents for a period of 10 years, unless a different period is specified by a special provision. This includes documentation related to the analysis, programming, and execution of computerized processes, as well as backup copies of data supporting invoicing and accounting software.

Whenever taxpayers exercise a right with a time frame exceeding the previously mentioned period, the obligation to file and preserve all books, records, and supporting documents shall remain in effect until the expiration of the statute of limitations for the assessment of the corresponding taxes.

Invoices and other tax-relevant documents must be kept in a sequential and uninterrupted manner, adhering to the filing plan and ensuring the individualization of each fiscal year, encompassing all documents in their entirety. These documents, if in paper format, may be digitized and archived electronically. The destruction of original documents issued or received in paper form is only permitted after the necessary controls have been ensured. For invoices related to the acquisition of goods or services, this can only occur after the right to VAT deduction has been exercised, if applicable, and the respective accounting record has been made.

All taxpayers, whether individuals or legal entities, with headquarters, a permanent establishment, or a tax residence in Portugal, who maintain organized accounting and are required to prepare an inventory, must report their inventories to the Tax Authority (AT). Taxpayers subject to the simplified taxation regime for personal income tax (IRS) or corporate income tax (IRC) in the year to which the inventory refers (2024) are exempt from this obligation. It is important to note that Non-Profit Sector Entities (ESNL) are also required to report their inventory, provided they meet the aforementioned requirements.

Are always required to appoint a Statutory Auditor (ROC) to perform the legal review of accounts, all of the following:

• Permanent representations and branches established in Portugal of companies headquartered abroad (non-residents with a permanent establishment in Portugal);
• Public limited companies (sociedades anónimas);
• Non-profit entities that present consolidated accounts;
• Private limited companies (sociedades por quotas) and non-profit entities that do not present consolidated accounts, whenever, for two consecutive years, two out of the following three thresholds are exceeded:

1. Total assets: 1,500,000 euros;
2. Total net sales and other income: 3,000,000 euros;
3. Average number of employees during the fiscal year: 50.

The appointment of a Statutory Auditor (ROC) is no longer required if the company establishes a supervisory board or if two of the three previously mentioned criteria are not met for two consecutive years.

Regarding private social solidarity institutions and similar entities covered by the Cooperation Protocol signed by the National Confederation of Solidarity Institutions, the Union of Portuguese Misericórdias, and the Union of Portuguese Mutualities with the Ministry of Solidarity and Social Security, the above-mentioned thresholds are multiplied by a factor of 1.70.

The provisions of the previous paragraph also apply to humanitarian firefighter associations.

Legal basis: Article 262 of the CSC; Circular No. 18/2024 of the OROC; Article 12 of Decree-Law No. 36-A/2011, of March 9.

A single-member limited liability company is formed by a sole shareholder, either an individual or a legal entity, who holds the entire share capital. The company’s name must include the term “single-member company” or the word “single-member” before “limited” or its abbreviation “Ltd.”. Effects of Sole Proprietorship:

• An individual may only be a shareholder in one single-member limited liability company.
• A limited liability company cannot have a single-member limited liability company as its sole shareholder.
• In the event of a violation of these rules, any interested party may request the administrative dissolution of the companies.
• The competent registration authority may grant a 30-day period to rectify the situation, which can be extended up to 90 days upon request by the interested parties.