The deadline for taxpayers to submit income declarations, that are not subject to withholding tax, such as domestic workers, has been extended until the end of February.
At issue is the so-called Model 10, whose deadline for delivery is usually the 10th of February, but an order recently published by the Secretary of State for Tax Affairs, Cláudia Reis Duarte, in the Official Gazette, has extended the deadline until the 28th of February.
The decision is justified through the recently announced package of tax simplification measures, which includes a harmonisation of the deadlines for compliance with reporting obligations, aiming to give more stability to the tax calendar and the predictability of the deadlines.
The Model 10 declaration is intended to declare tax-exempt and non-subject income earned by residents, which does not have to be included in the Monthly Remuneration Statement (DMR).
In addition, Model 10 is also used to declare income subject to IRC withholding tax, excluding those that are exempt from this withholding. Among the type of salaries that must be included in the declaration is the remuneration paid to domestic workers whenever there has been no withholding tax and they are not included in the DMR.
This year, this declaration gained new interest for most taxpayers who pay domestic workers’ salaries because a portion of this expense became deductible in the IRS – similar to what happens with health or education expenses, for example.
The annual IRS returns that have to be submitted from the 1st of April will have to contain a field for this new deduction and, for this to happen, it will be necessary for the Social Security Institute to communicate to the Tax and Customs Authority (AT), “through a model to be approved by ordinance of the member of the Government responsible for the area of finance, the value of the declared remuneration of domestic workers.”
Cláudia Reis Duarte’s order on the extension of the deadline for the delivery of the Model 10 determines the exemption from the application of additions or penalties, provided that the declaration reaches the AT (via the Finance Portal) by the 28th of February 2025.
Samantha Gannon
info at madeira-weekly.com
