Portugal’s New Stamp Duty Requirements are Nearly Here – Are You Ready?

Ana Cristina Cardoso
December 10, 2020

This blog was last updated on January 11, 2024

The new stamp duty requirements in Portugal will come into effect in February 2021, having been previously delayed.

The delay has given insurers extra time to prepare for the upcoming changes but even with that additional buffer, many may still be unsure of the requirements and what is expected of them.

The new system will provide the Portuguese tax authority with accurate data on the amounts due and insurers will have to provide additional information to comply and to correctly submit declarations.

Ordinance no. 339/2019 of 1 October, sets up and approves the official model of the Monthly Stamp Duty Declaration, as well as the obligation of the Monthly Stamp Duty Declaration’s electronic submissions for all transactions, even those exempt from stamp duty.

Information required for Portugal’s Stamp Duty Declaration

Insurers will now be required to collect, disclose and submit additional information in the Monthly Stamp Duty Declaration.

Previously only the declared amount of stamp duty due was required – detail of policies was not required for reporting but this is changing.

Information required moving forward includes:

  • Policyholder’s tax ID:Tax ID issued by the policyholder’s country of residence
  • Policyholder’s country code: The code of the policyholder’s country of residence which should be the country issuing the policyholder’s tax ID
  • Territoriality: The exact location where the insurance premium has been issued from – i.e. inside or outside the Portuguese territory
  • Insured risk’s location in Portugal: The postcode of the area or region where the risk is located – i.e. Continent (Mainland)/Azores/Madeira, since the Portuguese tax authorities require the stamp duty to be filed regionally

In addition to this information, the Law Decree no. 119/2019 revokes the “offsetting” mechanism relating to the tax delivered in previous periods that had allowed insurers to deduct the amount overpaid against future liabilities.

Insurers must now submit a Replacement Declaration whenever there are changes to the amounts previously declared.

If the previously declared tax is higher than that actually due, the Tax and Customs Authority should reimburse the excess amount by the end of the second month following the submission of the replacement declaration, providing it’s been delivered within one year and doesn’t contain any filling errors.

If the Replacement Declaration results in a higher amount than that previously paid, then fines for missing tax may be imposed in addition to the payment of the difference.

This Law Decree also provides the possibility for insurers to file a Gracious Claim whenever there is an improper settlement. This mechanism should be used to request a refund of negative amounts for policies declared prior to January 2021.

This change is just another example in the list of tax authorities requesting additional information on a more frequent basis, in an effort to minimise tax gaps. We don’t see this trend disappearing and we recommend that insurers stay abreast of the latest regulations to be prepared for any future authorities requesting similar transactional information.

Understanding and interpreting local tax rules can be challenging and Sovos’ team of regional experts can help insurers navigate the complexities and ensure timely and compliant filing of taxes.

Take Action

Find out why Sovos is the leading solution provider for insurance premium tax compliance in Europe.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Ana Cristina Cardoso

As a Compliance Services Supervisor, Ana Cristina leads the Country Team, an integral part of IPT Managed Services at Sovos. Having joined Sovos in March 2017, she has worked in a number of roles which provided her with a deep knowledge of IPT, enabling her to ensure that tax compliance and submissions comply with the several tax authorities.
Share this post

2025 tax filing season
North America Tax Information Reporting
November 21, 2024
Top 5 FAQs to Prepare for the 2025 Tax Filing Season

This blog was last updated on November 21, 2024 While “spooky season” may be over for most of us, the scariest time of year for many businesses is right around the corner: tax filing season. As they brace themselves for the flood of forms, regulatory updates, and tight deadlines, the fear of missing a critical […]

dtc shipping law updates
North America ShipCompliant
November 13, 2024
DtC Shipping Laws: Key Updates for Alcohol Shippers

This blog was last updated on November 13, 2024 When engaging in direct-to-consumer (DtC) shipping of alcohol, compliance with different state laws is paramount and so keeping up with law changes is critical. In 2024, the rules in several states for DtC have already been adjusted or will change soon. Here is a review of […]

sales tax vs. use taxes
North America Sales & Use Tax
November 8, 2024
Sales Tax vs. Use Tax, Explained. Who Reports What, and When?

This blog was last updated on November 19, 2024 One of the core concepts in sales tax compliance is also one of the most frequently misunderstood: the differences between sales tax and use tax. These tax types may look similar on the surface, but knowing the differences is essential for staying compliant and avoiding costly […]

2025 bond project
North America Tax Information Reporting
November 4, 2024
2025 NAIC Bond Project – The Insurer’s Guide

This blog was last updated on November 14, 2024 The regulatory landscape for insurance companies is undergoing significant changes with the Principles-Based Bond Project which is set to take effect on January 1, 2025. These changes, driven by the National Association of Insurance Commissioners (NAIC), will impact how insurance companies classify and value bond investments, […]

E-Invoicing Compliance EMEA VAT & Fiscal Reporting
November 1, 2024
VAT in the Digital Age Approved in ECOFIN

This blog was last updated on November 7, 2024 The long-awaited VAT in the Digital Age (ViDA) proposal has been approved by Member States’ Economic and Finance Ministers. On 5 November 2024, during the Economic and Financial Affairs Council (ECOFIN) meeting, Member States unanimously agreed on adopting the ViDA package. This decision marks a major […]