The IRS tax assessment notice (nota de liquidação do IRS) is the document issued by the Portuguese Tax Authority that sets out the calculations used to determine whether you have tax to pay or are entitled to a refund.
If you are unsure how to interpret this document, this guide explains the most important sections and what each one means.
IRS Tax Assessment Notice: What it is and how to read it
Tax assessment notices are issued after the Portuguese Tax and Customs Authority has processed your annual IRS tax return.
The document is normally sent to your registered tax address. Taxpayers who have opted for, or are required to use, an Electronic Mailbox (Caixa Postal Eletrónica – CPE) will receive it electronically instead.
As a general rule, for tax returns submitted within the legal filing deadline, the IRS tax assessment notice is made available by the Portuguese Tax Authority by 31 July.
How to obtain your Tax Assessment Notice
You can access the document through the Portal das Finanças website by following these steps:
Step 1: Access the Portal das Finanças website through this link;
Step 2: Log in using your taxpayer number (NIF/VAT) and password;
Step 3: Select “All Services (Todos os Serviços)” from the menu on the left-hand side;
Step 4: Locate “Documents (Documentos)” and select “Request Certificate (Pedir Certidão)”;
Step 5: Choose “Certificate Request (Pedido de Certidão)”, followed by “IRS Tax Assessment (Liquidação de IRS)”;
Step 6: Enter the relevant tax year;
Step 7: A message confirming the “IRS Tax Assessment Certificate Request (Pedido de Certificação de Liquidação de IRS)” will appear.
Step 8: Click “Obtain”, and the document will be generated automatically, allowing you to download it.
When you open the assessment notice, you will notice that it contains a significant amount of information. Below, we explain the main sections that taxpayers should understand.
Understanding Your IRS Tax Assessment Notice
- Gross Income
This is the total income earned during the relevant tax year.
It includes employment income, pensions, self-employment income, and any other taxable income declared on your IRS return.
- Tax Losses Carried Forward
Taxpayers who recorded tax losses in previous years may be able to offset those losses against future taxable income, subject to the applicable legal rules.
- Taxable Income
This is the amount of income that remains after deducting specific deductions, carried-forward losses, allowances, and other eligible deductions from your gross income.
It is this figure that is used to calculate your income tax.
- Exempt Income Included for Tax Rate Purposes
Certain types of income are exempt from taxation but are still taken into account when determining the tax rate applicable to your remaining taxable income.
Examples include income earned while working on diplomatic missions or under certain international cooperation agreements.
- Family Quotient
The family quotient divides taxable income according to the number of taxpayers included in the return.
For married couples or partners in a recognised de facto union who file a joint tax return, the taxable income is divided by two before the applicable tax rate is determined.
- Tax Calculated and Deduction Amount
This section shows the amount of tax calculated based on your taxable income.
It also includes any deduction amount that is subtracted from the calculated tax under the applicable tax brackets.
- Tax on Autonomous Taxation
Certain types of income are subject to autonomous taxation, meaning they are taxed separately at a fixed rate instead of being combined with your remaining taxable income.
The corresponding tax amount is shown in this section.
- Total Tax Liability
This represents the amount of tax due before any tax credits, deductions, or withholding taxes are taken into account.
- Tax Deductions
This section includes all eligible deductions claimed on your tax return, such as qualifying healthcare expenses, education costs, housing expenses, and other deductions permitted under Portuguese tax law.
- Municipal Tax Benefit
Some Portuguese municipalities return part of the IRS revenue collected from their residents.
Where applicable, this municipal tax benefit appears in your assessment notice and reduces your overall tax liability.
- Additional Tax Charges
This section includes any additional tax payable, such as penalties arising from the early withdrawal of funds invested in tax-advantaged savings products, including Retirement Savings Plans (Plano Poupança Reforma – PPR).
- Net Tax Liability
This is the final amount of tax payable after all eligible deductions and tax credits have been applied.
- Advance Tax Payments
This section shows advance tax payments made during the year, typically by self-employed taxpayers who were required to make payments on account because insufficient tax had been withheld at source in previous years.
- Tax Withheld at Source
This represents the tax already withheld from your income throughout the year by your employer or other paying entities.
These amounts are credited against your final tax liability.
- Final Tax Assessment
This is the final calculation carried out by the Portuguese Tax and Customs Authority after taking into account your net tax liability, withholding taxes, advance payments, and any other applicable adjustments.
It determines whether you are entitled to a tax refund or whether you still have tax to pay.
Conclusions
Understanding your IRS tax assessment notice is essential for confirming that your tax return has been processed correctly and that the calculations made by the Portuguese Tax Authority are accurate.
If you have any questions or believe there may be an error in your assessment, you should seek advice from a certified accountant, who can review the document and provide professional guidance.