1. GENERAL DEFINITION
2. NATURE OF THE OBLIGATION
2.1 Obligation to Issue
2.1.1 Obligation regarding income
2.1.1.1 Category B income (business and professional income)
2.1.1.2. income from legal persons
2.1.1.3 Category F income (property income)
3. TYPES OF INVOICE
3.1 Simplified invoice
3.2 Invoice Receipt
4. HOW DOCUMENTS ARE ISSUED
5. TIME LIMIT FOR ISSUING
6. RETENTION PERIOD
7. INFORMATION TO BE INCLUDED ON THE INVOICE
8. HOW TO MOTIVATE THE TAXPAYER TO DEMAND AN INVOICE
9. CONSEQUENCES/SANCTIONS OF THE TAXPAYER'S FAILURE TO ISSUE INVOICES AND/OR RECEIPTS
9.1 PRESUMPTIONS
9.2 CLASSIFICATION OF CONDUCT AS ADMINISTRATIVE OFFENSES AND CRIMES
1. GENERAL DEFINITION
An invoice is an essential document in the context of commercial transactions and the provision of services, corresponding to one (or more) commercial operation.
Decree-Law no. 28/2019, of February 15, on the processing of invoices and other tax-relevant documents for VAT, defines “Invoice” as “a document in paper or electronic format which: Contains the elements referred to in articles 36 or 40 of the VAT Code, including the invoice, the simplified invoice and the invoice-receipt; and Constitutes an invoice rectification document under the legal terms.” (cfr. i) and ii) of al. c) of art. 2 of the aforementioned Decree-Law)
*
2. NATURE OF THE OBLIGATION
According to the provisions of article 31 of the General Tax Law (hereinafter referred to as the LGT) there are two types of obligations of taxable persons: a main one, to pay the tax debt (no. 1); and ancillary ones, to pay the tax debt (no. 2). The main obligation is to pay the tax liability (no. 1); and accessory obligations, which “are intended to enable the tax liability to be determined, namely the submission of declarations, the display of tax-relevant documents, including accounts or records, and the provision of information” (no. 2), thus enabling the taxes due to be settled and, consequently, the tax liability to be paid (main obligation).
To this end, Article 44(1) of the Value Added Tax Code (henceforth referred to as CIVA) states that “The accounts must be organized in such a way as to enable clear and unequivocal knowledge of the elements necessary for calculating the tax, as well as to enable its control, including all the data necessary for completing the periodic tax return”, and Article 45 of the CIVA also states that “The accounts must be organized in such a way as to enable clear and unequivocal knowledge of the elements necessary for calculating the tax, as well as to enable its control, including all the data necessary for completing the periodic tax return”. 45 of the CIVA states that “The transactions mentioned in paragraph 2(a) of the previous article must be recorded after the corresponding invoices have been issued, until the declarations referred to in articles 41 or 43 have been submitted, if they have been sent. º or 43 º, if sent within the legal time limit, or until the end of this time limit, if this obligation has not been fulfilled” (no. 1), and that ”For the purpose of recording the transactions referred to in paragraph 2(a) of the previous article, registration must be made after the corresponding invoices have been issued, until the declarations referred to in articles 41 and 43 are submitted. For this purpose, invoices, return notes and other documents rectifying invoices (...) shall be identified by the aforementioned designations and numbered sequentially, in one or more properly referenced series, and their duplicates shall be kept in the respective order, as well as all copies of those that have been annulled or rendered unusable, with the necessary annotations to identify those that replaced them, where appropriate” (no. 2).
2.1 Obligation to issue
With regard to the obligation to issue invoices, we highlight the provisions of Article 29(1)(b) of the CIVA, which states that, “In addition to the obligation to pay the tax, the taxable persons referred to in Article 2(1)(a) (1) must, without prejudice to the provisions of special provisions: issue an invoice for each transfer of goods or provision of services, as defined in Articles 3 and 4, irrespective of the nature of the goods or services provided”. Regardless of the status of the purchaser of the goods or recipient of the services, even if they do not request it, as well as for payments made to them before the date of the transfer of goods or provision of services”. (This is without prejudice to the fact that the taxable person may resort to processing global invoices (Article 29.6 CIVA))
(1) Natural or legal persons who, independently and on a regular basis, engage in production, trade or the provision of services, including mining, agriculture and the free professions, as well as those who, in the same independent manner, carry out a single taxable transaction, provided that this transaction is connected with the exercise of the aforementioned activities, wherever this takes place, or when, regardless of this connection, this transaction fulfills the conditions for the actual incidence of personal income tax (IRS) or corporate income tax (IRC).
2.1.1 Mandatory income
2.1.1.1 Category B income (business and professional income)
According to the provisions of article 115 of the CIRS, the legislator has laid down two obligations with regard to the income of individuals, specifically category B and category F. As such, according to article 115(1) of the CIRS, “Holders of category B income are obliged: a) To issue an invoice, receipt or invoice-receipt, on an official model, for all sums received from their clients, for the transfers of goods or provision of services referred to in paragraphs a) and b) of no. 1 of article 3. b) To issue an invoice under the terms of Article 29(1)(b) of the VAT Code for each transfer of goods, provision of services or other transactions carried out and to issue a discharge document for all sums received.”
Furthermore, the legislator imposed an obligation on people who pay the income provided for in article 3 of the CIRS to “demand the respective receipts or invoices”.
With regard to the isolated act, Article 2(3) of Ministerial Order 338/2015 of October 8 clarifies that “Taxpayers who carry out an isolated act, under the terms of Article 3(3) of the IRS Code, may comply with the invoicing obligation on the Finance Portal under the terms of Article 29(21) of the VAT Code, by issuing an invoice and a receipt or an invoice-receipt.”
2.1.1.2 Income from legal persons
With regard to the income of legal persons, article 123 of the CIRC states that “Commercial or civil companies in commercial form, cooperatives, public companies and other entities that carry out, as their main activity, a commercial, industrial or agricultural activity, with their registered office or effective management in Portuguese territory, as well as entities that, although they do not have their registered office or effective management in that territory, have a permanent establishment there, are obliged to have organized accounts under the terms of the law which, in addition to the requirements indicated in no. 3 of article 17, are subject to the following requirements º 3 do artigo 17.º, allows the control of taxable profit” (no. 1) and that ‘In the execution of the accounts (...) All entries must be supported by supporting documents, dated and capable of being presented whenever necessary’. (paragraph 2(b)).
As for the payment of income, Article 132(2) of the CIRC states that “The provisions of Article 115(4) of the IRS Code shall apply with the necessary adaptations to income subject to IRC.”
2.1.1.3 Category F income (property income)
As for Category F income holders, according to Article 115(5) of the CIRS, “(...) they are obliged: a) To issue a discharge receipt, on an official model, for all sums received from their tenants, for the payment of the rents referred to in Article 8(2)(a) to (e), even if as a deposit, advance or reimbursement of expenses.”
*
3. TYPES OF INVOICE
With regard to the issuing of invoices, Decree-Law 198/2012 of August 24 establishes measures to control the issuing of invoices and other tax-relevant documents, defining how they are to be communicated to the Tax and Customs Authority.
To this end, it states that “Natural or legal persons who have their registered office, permanent establishment or tax domicile in Portuguese territory and who carry out transactions subject to VAT here, are obliged to communicate to the Tax and Customs Authority (AT), by electronic data transmission, the details of invoices issued under the terms of the VAT Code, as well as the details of documents that enable the checking of goods or services and receipts, in one of the following ways:
a) By real-time electronic data transmission;
b) By electronic data transmission, by sending a standardized file structured on the basis of the SAF-T (PT) file, created by Ministerial Order no. 321-A/2007, of March 26, in its current wording;
c) By direct insertion into the Finance Portal;
(...) (cfr. no. 1 of art. 3 of Decree-Law no. 198/2012, of August 24)
Decree-Law no. 28/2019, of February 15, on the processing of invoices and other tax-relevant documents for VAT purposes, regulated the obligations relating to the processing of invoices and other tax-relevant documents, as well as the obligations to keep books, records and the respective supporting documents, which fall on taxable persons subject to value added tax (VAT).
As such, and in practical terms, there are three general invoice models in force in our legal system - the invoice, the simplified invoice and the invoice-receipt.
3.1 Simplified invoice
Having defined the invoice in general terms (see 1 above), it should be noted that, with regard to simplified invoices, Article 40(1) of the CIVA states that “The obligation to issue an invoice provided for in Article 29(1)(b) of the CIVA may be complied with by issuing an invoice in accordance with Article 29(1)(b) of the CIVA”. Article 29(1)(b) may be complied with by issuing a simplified invoice for transfers of goods and services for which tax is due in national territory, in the following situations: a) transfers of goods made by retailers or street vendors to non-taxable persons, where the value of the invoice does not exceed €1,000; b) other transfers of goods and services where the value of the invoice does not exceed €100.”
It differs from invoices in the sense that a receipt is not associated with it as proof of payment, corresponding to an “invoice-receipt” and containing less data than that required for an invoice.
3.2 Receipt Invoice
A receipt is a document issued to demonstrate compliance with the payment obligation contained, as a rule, in an invoice.
Thus, once an invoice has been issued, receipt(s) must be issued for each payment made.
It should be noted that, in addition to the above-mentioned obligation of the persons paying the income provided for in article 3 of the CIRS to “demand the respective receipts or invoices” - it should also be noted that, under the terms of article 787(1) of the Civil Code, “The person who fulfills the obligation has the right to demand discharge from the person to whom the payment is made, and the discharge must be in the form of an authentic or authenticated document or be notarized, if the person who fulfilled the obligation has a legitimate interest in doing so.”
In turn, according to the provisions of Article 476 of the Commercial Code, “The seller may not refuse the buyer an invoice for the things sold and delivered, with a receipt for the price or the part of the price that he has pocketed.”
It may happen that the commercial transaction takes place at the same time as payment.
In this case, an invoice-receipt may be issued, which is a document showing the commercial transaction, the enforceability of payment and proof of payment.
*
4. HOW DOCUMENTS ARE ISSUED
As for the means of processing, article 3 of Decree-Law no. 28/2019, of February 15, states that “Taxable persons must ensure that invoices and other tax-relevant documents are processed in one of the following ways: a) Computer invoicing programs, including invoicing applications made available by the Tax and Customs Authority (AT); b) Other electronic means, namely cash registers, electronic terminals or electronic scales; c) Pre-printed documents in an authorized printing house.”
In specific cases, and under the terms of article 4 of the aforementioned Decree-Law, taxable persons may be obliged to use “(...) exclusively computer programs that have been previously certified by the AT”. This is the case, for example, if they have a turnover of more than €50,000.00, use computer invoicing programs and have organized accounts.
Currently, for the purposes of and in accordance with the current wording of article 115 of the CIRS and article 29 of the CIVA, Ministerial Order no. 338/2015, of October 8, determines the invoice, receipt and invoice-receipt models, as well as the respective instructions for completion.
Pursuant to Article 3(1) of the Order, “Filling in and issuing invoices, receipts and invoice-receipts must be done on the Finance Portal on the Internet, at the electronic address www.portaldasfinancas.gov.pt.”
Under the same terms, and in accordance with the provisions of Article 6(1) of Ministerial Order 98-A/2015, of March 31, with regard to the electronic rent receipt referred to in Article 115(5)(a) of the IRS Code, the electronic rent receipt must be filled in and issued on the Finance Portal, at the electronic address www.portaldasfinancas.gov.pt.
*
5. ISSUANCE DEADLINE
With regard to the deadline for issuing and formalities of invoices, Article 36(1) of the CIVA states that “The invoice referred to in Article 29(1)(b) must be issued: a) no later than the 5th working day following the day on which the tax is due under the terms of Article 7; b) no later than the 15th day of the month following the month on which the tax is due under the terms of Article 7, in the case of intra-Community supplies; c) no later than the 15th day of the month following the month on which the tax is due under the terms of Article 7. c) on the date of receipt, in the case of payments relating to a transfer of goods or provision of services which has not yet taken place, as well as in the case where payment coincides with the time when the tax is due under Article 7.”
With regard to the cases provided for in Article 29(6) of the CIVA, Article 36(2) of the CIVA states that “In cases where global invoices are issued, they may not be processed more than five working days after the end of the period to which they relate.” (However, in certain circumstances, the Minister of Finance may set longer invoicing deadlines)
With regard to the invoicing of goods sent on consignment, Article 38(1) of the CIVA states that “In the case of the delivery of goods on consignment, invoices shall be issued within five working days of: a) the time when the goods are sent on consignment; b) the time when, in respect of such goods, the tax is due and payable under the terms of Article 7(5) and (6).”
*
6. RETENTION PERIOD
With regard to the period for keeping documents, article 52 of the CIVA states that “Taxable persons are obliged to file and keep in good order for the following 10 calendar years all books, records and respective supporting documents, including, when the accounts are kept by computerized means, those relating to the analysis, programming and execution of processing.” (paragraph 1), and “For the records provided for in Article 50(1)(d) and Article 51 and the documents attached thereto, the 10-year period referred to in the previous paragraph shall run from the date on which the last of the regularizations provided for in Articles 24 and 25 is made.” (no. 2).
This is in line with the provisions of Article 40 of the Commercial Code, according to which “Every trader is obliged to file the correspondence issued and received, his commercial bookkeeping and the documents relating to it, and must keep everything for a period of 10 years” (paragraph 1), and “The documents referred to in the previous paragraph (...) may be filed using electronic means” (paragraph 2).
*
7. INFORMATION TO BE INCLUDED ON THE INVOICE
According to Article 36(5) of the CIVA, “Invoices must be dated, numbered sequentially and contain the following information”:
a) The names, company names or corporate names and registered office or address of the supplier of goods or services and of the recipient or purchaser subject to tax, as well as the corresponding tax identification numbers;
b) The quantity and usual name of the goods or services supplied, specifying the information needed to determine the applicable rate; packages not actually traded must be indicated separately and with an express mention that it has been agreed that they will be returned.
c) the price, net of tax, and the other elements included in the taxable amount
d) The applicable rates and the amount of tax due
e) The reason for not applying the tax, if applicable
f) The date on which the goods were placed at the purchaser's disposal, on which the services were performed or on which payments were made prior to the transactions taking place, if this date does not coincide with the date of issue of the invoice.
In addition, under the terms of articles 3 and 4 of Decree-Law 198/2012 of August 24, there are elements that must be included on invoices, including the following:
a) The issuer's tax identification number;
b) Invoice or document number;
c) Date of issue;
d) Type of document, under the terms of the data structure referred to in Ministerial Order no. 321-A/2007, of March 26, which regulates the standardized file known as SAF-T (PT);
e) Tax identification number of the purchaser who is subject to VAT, when it has been entered at the time of issue;
f) Tax identification number of the purchaser who is not subject to VAT, when the purchaser requests that it be included in the act of issue;
g) Taxable value of the supply of services or transfer of goods;
h) Applicable rates;
i) The reason for not applying the tax, if applicable;
j) Amount of VAT or Stamp Duty paid;
k) The words “VAT - cash system”, if applicable.
l) The certificate number of the program that issued them;
m) Identification of the document of origin.
n) Identification of the rectified document;
o) Identification of the tax country or region;
p) Unique document code.
*
8. HOW TO MOTIVATE THE TAXPAYER TO DEMAND AN INVOICE
As we have already seen, the obligation has been imposed to, in certain circumstances, demand an invoice for the documents that have been provided as the beneficiary of the commercial transaction.
In this segment, the punishment for violating the duty to demand invoices and receipts when mandatory has been determined, with paragraph 2 of the General Regime of Tax Infringements (hereinafter referred to as the RGIT) providing that “Failure to demand, under the terms of the law, the passing or issue of invoices or receipts, or failure to keep them for the period of time provided for therein, is punishable by a fine of (euro) 75 to (euro) 2000.”
This provision is innocuous, as it attempts to make ordinary citizens replace the state in monitoring the issuing of invoices and receipts, and there is no case law on its application.
Recognizing (in a way) the failure of the legislation in this regard, the “Lucky Invoice” lottery was created by Decree-Law no. 26-A/2014, of February 17, and regulated under the terms of Ordinance no. 44-A/2014, of February 17.
In other words, faced with the practical problem of enforcing the provisions of Article 123(2) of the RGIT, the government opted to create a “positive stimulus”.
*
9. CONSEQUENCES/SANCTIONS OF THE TAXABLE PERSON'S FAILURE TO ISSUE INVOICES AND/OR RECEIPTS
As already mentioned, invoices and receipts demonstrate, respectively, a commercial transaction and the demand for payment (with an inherent VAT assessment, where applicable), and the payment of the respective amount.
These documents are therefore essential for determining the taxable person's main obligation, i.e. to pay the amount due as tax.
9.1 PRESUMPTIONS
As a way of combating the other problems associated with non-compliance with these tax obligations, the legislator has opted to use various presumptions to determine the income earned.
This is the case with indirect methods of determining taxable income, under the terms of article 87 ss of the LGT, applicable in the following situations:
a) the impossibility of proving and quantifying directly and exactly the elements indispensable for correctly determining the taxable amount of any tax (art. 88 of the LGT)
b) the taxable amount of the taxpayer differs, without justifiable reason, from that which would result from the application of certain objective indicators (87.1.c) L.G.T.)
c) the income declared to the IRS is significantly lower, without justification, than certain income standards (87.1.d) L.G.T.)
d) taxable persons present, without justification, zero taxable results or tax losses for several consecutive financial years (87.º n.º 1 al. e) L.G.T.),
e) the existence of an increase in assets or expenses of more than €100,000, occurring at the same time as a failure to declare income or the existence, in the same tax period, of an unjustified discrepancy with the declared income (87.º n.º 1 al. f) L.G.T.).
In these situations, Article 9(1)(d) and (3) stipulate that “unjustified increases in assets, determined in accordance with Articles 87, 88 or 89 of the Income Tax Code” must be considered category G income. º, 88 º or 89.º-A of the general tax law” and the ‘increases in assets referred to in no. 5 of article 89.º-A of the general tax law’, which, under the terms of no. 16 of art. 72 of the C.I.R.S., “Unjustified increases in assets referred to in Article 9(1)(d), with a value of more than €100,000, shall be taxed at the special rate of 60%.”
Compensatory interest, on the other hand, will not be taxable, nor will it be deductible as IRC.
Finally, the application of these methods may also result in the loss or non-compliance with the conditions for benefiting from tax benefits.
Furthermore, the legislator has also made use of this legislative technique, as is the case, by way of example only, under the terms of Article 86 of the CIVA, according to which “Unless proven otherwise, goods are presumed to have been acquired if they are located in any of the places where the taxable person carries out his business and goods acquired, imported or produced that are not located in any of these places are presumed to have been transferred.”
9.2 CLASSIFICATION OF CONDUCT AS ADMINISTRATIVE OFFENSES AND CRIMES
In addition to applying presumptions to finally determine the amount of tax due, the legislator also determined that “Failure to issue receipts or invoices or issuing them after the legal deadlines, in cases where the law requires it, is punishable by a fine of (euro) 150 to (euro) 3750”, which is an administrative offense (see Article 123(1) of the RGIT).
In the case of the transportation of goods, Decree-Law no. 147/2003 of July 11 stipulates in its paragraph 1 that “All goods in circulation in national territory, regardless of their nature or type, which are the object of transactions carried out by taxable persons subject to value added tax must be accompanied by transport documents processed under the terms of this diploma”. (emphasis added).
In turn, under the terms of Article 2(1)(b) of Decree-Law 147/2003, of July 11, and for the purposes of the aforementioned Decree-Law, a “transport document” is considered to be an invoice, delivery note, returns note, transport note or equivalent documents.” (bold ours).
Article 7(1) of the aforementioned Decree-Law states that “The carriers of goods, whatever their destination and whatever the means used for their transportation, must always demand the original and duplicate of the document referred to in Article 1 or, where appropriate, the code referred to in Article 5(7)” (emphasis added).
With regard to infringements, Article 14(1) of the aforementioned Decree-Law stipulates that “Failure to issue or immediately display the transport document or the documents referred to in Article 1 and Article 7(2) or the situations provided for in Article 6(2) to (4) shall result in the infringers incurring the penalties provided for in Article 117 of the General Tax Infringement Regime. These penalties are applicable both to the sender of the goods and to the carrier who is not a regular public carrier of passengers or goods or concessionary companies providing the same service.” (emphasis added).
As such conduct will be penalized under the terms of the aforementioned article, the provisions of article 117 of the RGIT will apply, under the heading “Failure or delay in presenting or displaying documents or declarations and communications”.
In addition to the above, since invoices and receipts are documents that demonstrate, respectively, a commercial transaction and the demand for payment (with the inherent assessment of VAT, when applicable), and the payment of the respective amount, and are therefore essential to determine the main obligation that falls on the taxable person, i.e. to settle the amount due as tax, failure to comply with the duties to issue and, consequently, communicate to the Tax Authority may also lead to a conviction for committing a crime of tax fraud.
As such, if the missing amount is less than €15,000.00, it is an administrative offense, punishable by a fine (e.g. article 118 of the RGIT).
If the missing amount is equal to or greater than €15,000.00, it could be a crime of tax fraud (punishable by imprisonment for up to three years or a fine of up to 360 days) - cf. article 103(1) and (2) of the RGIT; or a crime of tax fraud (punishable by imprisonment for up to three years or a fine of up to 360 days) - cf. article 103(1) and (2) of the RGIT. It could also be a crime of qualified tax fraud (punishable by a prison sentence of one to five years for natural persons and a fine of 240 to 1200 days for legal persons) - see Article 104(1) and (2)(b) of the RGIT.
Komentarze