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Alojamento Local AL licence
Information on and Requirements for obtaining an AL Licence
As a result of changes in Portuguese law which took place in the latter part of 2014, any property owner who rents their property either privately or through an agent, is legally obliged to register this activity, obtain a licence, and pay taxes on the income earned.
In order to obtain the licence, you must first register the activity at the tax department. This in effect means you are registering as a 'self-employed' person and your activity is renting your property. At the same time, if you are non-resident in Portugal, you must also register for VAT (even though you may ultimately be exempt from this). In order to register for VAT, you must have a Fiscal Representative here.
Once your activity is registered at the tax department, the licence can be applied for. Thereafter, you must raise invoices for every rental client you have - be they private or via an agent. These invoices can be raised 'online' - a service the Fiscal Representative will offer. Invoices must be raised within 5 days after the service has been given i.e. 5 days after the departure of the rental client.
In terms of income tax - the activity you register for falls under the 'simple regime' of taxation - i.e. this assumes that the profit can be assessed at 35% of the income. A flat rate of 25% would apply to that amount making tax payable in the region of 8.75% of the gross income received, ie, 0.35 x 0.25 = 8.75% [ 10,000.00 x 0.0875 = 875.00] . VAT is only applicable on income from € 10,000.
So, the first step in the process is to appoint a fiscal representative if you don't already have one. If you wish Villa Club to fulfil that role and complete the process for you, you will need to sign a document nominating Villa Club as your Fiscal Representative. We will submit this document to you for signature and return.
In the case of owners of offshore companies, as well as the above they have to have in place either a long term rental contract or a 'Contrato de comodato' (free leasing contract) between the offshore company and themselves. This would in effect result in you appointing yourself as the person with the AL Licence which would be in your personal name. With this type of contract in place, you can then simply register yourself for the AL activity and pay tax under the simplified regime. We suggest discussing your options with your lawyer or accountant for their opinion and quote for the drawing up of the contract along with the necessary Power of Attorney to sign on behalf of the offshore company. Please note with a contrato de comodato there is no need to register for tax, with a rental contract, however, the off shore company will pay 25% IRC less some deductible expenses.
Please be aware, with these types of contracts you are obliged to have an Energy Certificate for the property which we can arrange on your behalf.
The information/documentation required to register your activity is as follows:-
+Your Portuguese tax number +Copy of your passport +Copy of a recent utility bill as proof of your place of residence in the UK +Copy of the last IMI paid If your property is registered in 2 names, we will require both copies of the IMI bills +Bank account NIB/SWIFT code and proof of account - this should be in the form of documentation from your bank - either a letter from the bank or a bank statement +Your national insurance number in the UK. +Proof you are paying social security in the UK or that you are retired. The former can be in the form of a pay slip or an A1 form obtained from HM Revenue & Customs. The latter any valid document stating you are receiving a pension +Copy of Caderneta Predial this your lawyer will be able to provide +Habitation Licence this your lawyer will be able to provide +Registo Predial this your lawyer will be able to provide
Once registration is made at the tax office, the application form for the AL Licence will need to be completed, signed by yourself and submitted to the local council together with proof your activity has been registered.
The costs involved in dealing with the process and arranging the visits to the tax office and town hall are as follows:
-Registration of activity of fiscal activity - € 200(one off payment) -Fiscal representation and end of year tax return - € 300 (annual fee) -Fiscal representation for individual and company - €400 (annual fee) -Any rental income not generated by Villas & Vacations will be subject to 5% of invoice -Additional accounting for processing IVA returns (where applicable) € 300 All of the above are plus IVA
NB: Any utility inspections which may be required would be charged separately. We strongly recommend that you at least have the basic 'certifications' on file in respect of gas and electricity installations in case the council should wish to make an inspection of the property.
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