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Whistle-blowers help Tax Authorities recover unpaid “AL” taxes

Reporting possible tax evasion in Local Lodging and failure to issue invoices by merchants allowed the Portuguese Revenue to collect an additional €1,000,000 in 2017. The anti-fraud division of the “AT” received and analysed 2,618 complaints and accusations of which 2,153 were made by other public entities, and 465 came from complaints by private individuals.

Tax Office to offer direct debit

The Tax Office (AT) is working on a system which will allow taxpayers to pay their taxes by direct debit with a simple payment order. This “Simplex” measure should be available by the end of 2017. The expectation is that the “IUC” road tax and the “IMI” property tax will be the most likely candidates for this method of payment. They are the basis  of many fines for delays due to taxpayer forgetfulness

Hiring a Cleaner

Cleaning at regular intervals is an essential service in Local Lodging offerings. There are two methods of hiring cleaners: as an independent sole trader or as a domestic worker.

Sole Trader

The first is by far the more common of the two.  The Owner agrees to pay “X” Euros per hour for “Y” hours per day over an interval of “Z” (daily, weekly or monthly).  Upon completion of the interval, the Owner pays the Sole Trader and the Sole Trader issues an electronic green receipt.  The Sole Trader is solely responsible for his/her own Social Security contributions.

The same method applies when using a cleaning company.

Domestic Worker

The second method is as a Domestic Worker.  Here there are three contractual options:

  • Hourly: a minimum of 30 hours per month.  Retentions from pay to the Domestic Worker will be at 50% on an annual basis;
  • Monthly: Minimum of 80 hours/month where the worker has full normal rights and privileges;
  • Full time: where the minimum wage is €419.22 X 14 per annum.

For Social Security contributions, the basic hourly wage is €2.42 per hour. Total SS contributions are 28.6%; 19.9% is paid by the employer and 9.6% by the Domestic Worker.  The full SS monthly payment is €79.23.

In a new hiring situation, the Sole Trader method is usually simpler and more flexible for all. If the arrangement proves long-term, the position can evolve into a on-going Domestic Worker contract.


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