From January 1st, 2015 when working out your tax returns, only invoices that include your tax number (NIF) will be accepted by the taxman, according to the director general of the tax department, António Brigas Afonso.
Afonso said that taxpayers should always ask suppliers for invoices that include their tax number if they want later to submit them as legitimate expenses when working out income tax.
The new income tax rules will be published in the Official Gazette and according to the Ministry of Finance they allow the possibility of deducting 35% of household costs (supermarket, clothing, fuel and energy, for example) 15% of healthcare expenditure (up to a maximum of €1,000) and 30% of educational expenses (up to a maximum deductible of €800.)
Also allowable as a deduction is 15% of rent (up to a maximum deductible of €502) or 15% of expenditure on mortgage interest, in the case of home owners (up to a maximum deductible of €296) and 25% of the costs of nursing home fees (up to a maximum deductible of €403.75) and 15% of the VAT paid on each invoice from restaurants and hotels, hairdressers and mechanics up to a maximum deductible of €250.
António Brigas Afonso said that the calculation of deductable expenses is now based on the e-invoice system which will simplify the life of the taxpayer, as they simply need invoices, with VAT numbers for deductable purchases, which companies now automatically report online.
The tax authority now can list deductable expenses on the personal pages of each taxpayer on the Finanças web portal. This can be consulted at any time so as to help taxpayers fill in their annual tax returns.
The IRS Reform bill was approved in Parliament with the main measure being improved allowances for those with children.
