What is the Simplified Regime?
The simplified taxation regime is the most common option, and is 99 acres phone number data by default by the Tax and Customs Authority when a sole proprietor or self-employed professional starts a business. This is characterised by the taxation of income earned by applying coefficients, without taking into account the expenses of the activity. To be covered by this regime, the following requirements must be met:
Be a taxable person resident in Portugal;
Not being legally obliged to undergo a statutory audit of accounts;
Have an annual gross income of less than 200 thousand euros;
Have a balance from the previous tax period of less than 500 thousand euros.
The fact that you have fewer tax obligations and extra expenses - such as not having to hire an official accountant - is one of the main advantages of this regime. The main disadvantage is that you cannot deduct expenses, as the Tax Authority considers that 75% of the income obtained is net and that the remaining 25% corresponds to expenses. Find out the main advantages and disadvantages of opting for the simplified taxation regime.
What is Organized Accounting?
Organized accounting is the most efficient tax regime for more complex activities and when expenses related to the activity exceed 25% of income. This tax regime is mandatory in the following situations:
All types of companies such as public limited companies or limited liability companies;
All self-employed professionals or individual entrepreneurs who have a net annual income of more than 200 thousand euros.
Under the organised accounting system, you can deduct a large part of your professional expenses (e.g. fuel, accommodation, computer equipment, etc.) and accurately calculate your net income. The main disadvantages are the legal obligations (such as preparing annual tax files) and hiring a certified accountant (an additional expense that can cost between €150 and €200). Learn about the main advantages and disadvantages of organised accounting.
