New tax requirements for landlords raise many questions. Here are more answers to some of the most common queries.
10/14: Can I authorise a third party to issue electronic rent receipts on my behalf?
In the case where a homeowner surrenders the management process of the lease to an intermediary, a third party can issue the electronic rent receipt on behalf of the owner. Agents who are authorised to issue the receipt on behalf of the landlord do not have access to other tax information of the owner. It should be stressed that, while authorising a third party to issue receipts, the landlord is still ultimately responsible for the fulfilment of this obligation.
11/14: What are the procedures to authorise a third party to issue receipts in my name?
If the lease was created after April 1, 2015 and is already registered with the Finanças, the landlord may authorise a third party to issue the rent receipt, identifying the third party in Table VII of Modelo 2.
When the agreement began prior to April 2015, you must access your personal area on the Finanças website to authorize a third party to issue the electronic rent receipt. Go to the website → click Tax Services → Submit → Rent → Send Rent Receipt. Select the appropriate contract and indicate the fiscal number (NIF) of the authorised third party.
12/14: I have a power of attorney to issue electronic rent receipts on behalf of the owners. How should I proceed?
You should go to a local Finanças office with the authorising documents for them to verify and record the authorisation that complies with the obligations of Modelo 2 and the issuing of electronic rent receipts.
13/14: The condominium leases a property. Who should communicate the elements of the contract and issue the electronic receipts?
The condominium administrator is the one who should issue receipts. To do this, he should go to the local Finanças office with the condominium board minute showing that he was duly appointed to comply with this obligation for the AT to verify and record the authorisation.
14/14: Is it possible to cancel an electronic rent receipt?
Yes, receipts can be cancelled if done before the end of the corresponding fiscal year. To do so, cancellations must be requested directly by the issuer of the receipt (normally, the landlord or the authorised third party) on the AT website.
Many of these changes have come about to counter widespread failure to report rental income. On the positive side, the reforms should help tenants to receive tax credits to which they are entitled – over €500 in tax credits in 2015. Unfortunately, the reforms also add new layers of red tape – albeit in electronic form – to an already cumbersome system. Only time will tell whether greater overall compliance will actually come as a result.
This is the final article of a three-part series
By Dennis Swing Greene
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Dennis Swing Greene is Chairman and International Tax Consultant for euroFINESCO s.a.