YOUR money

RICARDO CHAVES IS ON THE PLUS TEAM AND ANSWERS YOUR QUESTIONS ON THE ISSUES THAT AFFECT YOUR LIFESTYLE HERE. THIS MONTH, HE EXPLAINS HEALTHCARE, CHARITY DONATIONS, AND THE SAFETY OF BANK DEPOSITS

Is it worth signing up at the local health centre and standing in line for what could be hours? Are there savings to be made for regular treatments and even things like x-rays and cataract ops?

If you are a resident of Portugal you are entitled to register at the local health centre to have access to the Portuguese Health System (SNS). Portugal ranks 25th in the 2023 Health Care Index by Numbeo and 16th in Europe. It has one of the best healthcare systems in the world, not far from the ranking of Germany or the UK, and above others such as Sweden or the US.

Healthcare in Portugal is under a hybrid system with good public and private services. National health coverage is comprehensive, including all medical care apart from dental care costs. This service is available to all citizens and legal residents of Portugal.

To access public healthcare, everyone must pay a small fee for consultations and tests. Emergency care is free, but all other services incur a charge, sometimes due immediately. Everyone can receive hospital care, but you will be charged if the Portuguese national health services, a reciprocal agreement, or private health insurance, do not cover you. Obviously, if you wish to avoid waiting lists, you have the option of contracting private health insurance.

Why do supermarkets keep asking if I want my NIF number of the receipt when I shop? Should I say yes, and what’s the advantage?

In Portugal, some of the tax deductions are based on the invoices you request with your NIF, and that is the main reason why you are asked, almost everywhere, if you want an invoice with your NIF.

In supermarkets, the tax deduction falls into the group of general expenses and it is €250 per household member (€500 per couple). As this deduction corresponds to 35% of the amount spent, it means that if you spend €715 per year, you reach the limit (this is valid for invoices from supermarkets and all other general expenses, including utility bills).

There are other deductions, such as Medical and Health (15% with a cap of €1,000 per household), education (30%), housing expenses (15%), alimony and child support (20%) and nursing facilities and home care expenses (25%). There are also several sectors where the government offers you 15% of the VAT paid as a tax deduction; these are restaurants, hotels, hairdressers, vets, car maintenance and repairs amongst others.

If you have NHR status and your income is tax exempt, or if you pay tax at the flat rates of 10%, 20% or 28%, these deductions will not be considered in your tax return – these are for income streams that are taxed at the progressive tax rates.

You are not required to keep your invoices as they are automatically recorded on the tax portal (e-fatura portal), but it would be sensible to, in case you want to challenge the information in the portal.

I keep hearing mixed views on whether one should keep a large sum of money (the result of the sale of family jewellery) in a bank here. Is there a limit, and what protection is there if the bank goes into liquidation?

Customers who apply their savings in a deposit do not run the risk of losing the funds deposited. Regardless of the type of bank deposit, the credit institution must guarantee the depositor that it will reimburse the entire amount deposited on the due date or on the date allowed for early withdrawal if permitted. In the event of insolvency of a credit institution, the amounts invested in deposits are protected up to a maximum of €100,000, per credit institution and per depositor, whether the depositors reside in Portugal or not.

Are there any tax advantages if I donate part of my company’s (small company!) profits to a local charity?

If you have a business and pay corporate tax, any donations to charities are deductible up to 150% of the gift made, depending on the type of charity you donate to. If the donation is greater than €200, it should be done by bank transfer; you can also donate other items, such as assets or products of the company. The limit of the donation per year is 0.8% of your turnover. If you are a sole trader, you pay personal income tax and in this case the benefit is 25% of the donation with a limit of 15% of your tax bill.

You can choose to donate 0.5% of the tax you pay on your personal income tax return; this has no costs to you. Pick an organisation from a list of those eligible and the government will pay them 0.5% of the tax they are collecting from you.