By: PEDRO SIMÕES
THE YEAR of 2007 is fast coming to a close. Anyone who has any kind of income, it is advisable to make a tax plan so you know how much IRS tax is due. All of us need to plan everything in our life. With taxes, it is not different. It’s just one part of our daily work.
Knowing what we can deduct in our private taxes is quite important to decrease our fiscal tax. Some people are often prejudiced, mostly for their lack of knowledge. The IRS is the individual tax that is applied to all individuals that are resident in Portugal and to the ones who are even non-resident but have an income in Portugal.
What income must be presented by individuals? You must fill in your IRS form if you are an employee or self employed (green receipts or enterprise individual name) and if you have properties rented, financial investments (dividends) or if you have capital gains on selling shares and/or properties. Also if you are a pensioner, you must fill IRS form but only if the amount of pension is over the annual amount of the minimum salary.
Generally, the expenses that everyone can deduct on IRS are the following: health, education and school, expenses with retirement homes, house expenses and expenses with equipment for renewable energy, life and personal accident insurance as well as health insurance.
For the year of 2007, the fiscal or savings benefits we are able to deduct are: retirement saving accounts and share saving plans. People with these accounts with interest of less than 10,500 euros will not pay taxes.
Well, for 2007 you have the following different kinds of deductions:
The IRS form can be submitted until March 15 for employees and pensioners, and until April 30 for other people. If you are an employee but have any of the other income mentioned above, such as properties rented, financial investments (dividends), or if you have capital gains on selling shares or properties, you should present it all together before the end of April.
Submitting the tax declaration has changed since 2003. There is the possibility to use the official online tax page at www.e-financas.gov.pt. At the moment there are over six million users registered that submit a tax form on the web. It has grown hugely in popularity.
In 2003, users submitted more than 535,000 IRS tax declarations. In 2007, more than three million were submitted. The payments and the returns of tax declarations are now more effective and some income contributors are even obliged to do it on the website.
The calculation of the IRS individual tax rates are usually updated according to inflation. For 2007 they will increase around 2.3 per cent but the limits on the deductions mentioned have also increased 2.3 per cent. The maximum rate on IRS in 2007 is 42 per cent but just for incomes of more than 61,260 euros.
Whenever someone does not submit the tax return, the government will notify the contributor to do it and if the contributor still does not submit it, the government will find out the income and tax the contributor without any deductions.
In closing, knowing what deductions can be made is particularly important to reduce each person’s tax. Make a fiscal plan, it will help you and your tax.
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