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Learn all requirements and obligations

LOCAL ACCOMMODATION GUIDE

LOCAL ACCOMMODATION GUIDE ( ALOJAMENTO LOCAL [AL] )

The traditional lease and local accommodation (LA) are different and have their own legislation. The main

difference between the two is that, unlike the traditional lease, the Local Accommodation provides a

service that demands much more than the simple accommodation. The Local Accommodation requires

assets like furniture, home appliances, bed sheets, bath towels, kitchen equipment and other facilities,

very similar to the hotel industry.

Thus, if you dedicate yourself to the local accommodation, your property needs to be completely

furnished, equipped, and other complementary services like home cleaning and reception must be

provided for a maximum period of 30 days. It must also be advertised as a temporary accommodation or

as tourist rental.

INTRODUCTION1

UWU SOLUTIONS | WWW.UWU.PT | COMERCIAL@UWU.PT1 - INTRODUCTION

UWU SOLUTIONS | WWW.UWU.PT | COMERCIAL@UWU.PT2 - LEGAL REQUIREMENTS | MERE PRIOR NOTIFICATION

2 LEGAL REQUIREMENTSMERE PRIOR NOTIFICATION1

a) You will have to register your property. You can do that through a “Mere Prior

Notification” (Mera Comunicação Prévia) to the mayor. The registration will be

done automatically through the “Electronic Single Counter” (Balcão Único

Eletrónico);

b) The request is free of charge. The Electronic Single Counter will issue a valid

Portuguese license to open it for business (título válido de abertura), with the

property’s reference number.

UWU SOLUTIONS | WWW.UWU.PT | COMERCIAL@UWU.PT2 - LEGAL REQUIREMENTS | REQUIREMENTS TO BE CONSIDERED A LOCAL ACCOMMODATION

2 LEGAL REQUIREMENTSREQUIREMENTS TO BE CONSIDERED A LOCAL ACCOMMODATION2

a) The total of bedrooms in your properties must not exceed 9 and they cannot accommodate more than 30 people (unless they are classified as a “Hostel”);

b) Your properties must be in perfect conditions, with all installation works and equipment working appropriately;

c) All properties must be connected to the public water supply network and the public sewage network;

d) They must include tap water;

e) They must contain at least one window or balcony connected directly to the exterior so to ensures it has the appropriate ventilation conditions;

f)All properties must include furniture, equipment and the appropriate home utensils;

g) They must contain window blinds systems;

h) They must contain doors equipped with a security system that ensures guests’ privacy;

i) Toilets must contain a security system that ensures guests’ privacy;

j) The properties must include hygiene and cleaning conditions at all times;

k) It is also mandatory that all properties have a Complaints Book. (The said book can be acquired on the Portuguese Mint and Official Printing Office’s (INCM ) website)

UWU SOLUTIONS | WWW.UWU.PT | COMERCIAL@UWU.PT2 - LEGAL REQUIREMENTS | SAFETY REQUIREMENTS

2 LEGAL REQUIREMENTSSAFETY REQUIREMENTS3

a) Every house must comply with security requirements against fire risks (Decree-Law 220/2008 and Decree Order 1532/2008);

b) All properties with a total capacity to accommodate 10 or less people must include a fire-extinguisher, a fire blanket, a first aid kit and the national

emergency telephone number in a well visible place.

UWU SOLUTIONS | WWW.UWU.PT | COMERCIAL@UWU.PT

2 LEGAL REQUIREMENTSDISCLOSING THE ENTERING AND EXITING OF FOREIGNERS4

a) You can disclose to the Portuguese competent authorities about the entering and exiting of foreigners in a safe and electronic way, by registering on the Immigration and Borders Service (SEF) as a user of the Accommodation Bulletin (Boletim de Alojamento) Information System.

b) You must notify the entering and exiting of foreign guests in a period of three working days, starting from the check in day; and

c) You will have to keep the bulletins and their copies for a year.

2 - LEGAL REQUIREMENTS | DISCLOSING THE ENTERING AND EXITING OF FOREIGNERS

UWU SOLUTIONS | WWW.UWU.PT | COMERCIAL@UWU.PT2 - LEGAL REQUIREMENTS | ELECTRONIC GREEN RECEIPT

2 LEGAL REQUIREMENTSELECTRONIC GREEN RECEIPT5

a) If your service just includes the provision of services (and not the selling of goods) then you can issue an invoice-receipt (fatura-recibo) (also known as Electronic Green Receipt [Recibo Verde Eletrónico]) on the Portuguese Finances Institution (Portal das Finanças);

b) Another way you can issue an invoice is by accessing a certified program for that purpose.

UWU SOLUTIONS | WWW.UWU.PT | COMERCIAL@UWU.PT3 - HOW YOUR PROFITS WILL BE TAXED | INCOME TAX

3 HOW YOUR PROFITS WILL BE TAXEDINCOME TAX1

a) The first step you have to take if you want to rent a house to tourists is to register on the Tax Administration your accommodation service activity;

b) Every profit earned with the local accommodation activity will be taxed by the B category, e.g., as business profit.

c) There are two tax regimes:

i. Simplified Regime (Regime Simplificado) – if your profit from your local accommodation activity is less than 200,000 euros, you can choose between the simplified regime and the organized accounts regime; on the simplified regime, the profit to be taxed will be calculated with the 0.15 coefficient, which is applied to hotel services and other similar activities. This means you will only pay 35 percent of your total profit, since the other 65 will be regarded as costs of the activity, thus not object of taxation.

ii.Organized accounts – If you earn more than 200,000 euros a year with your local accommodation activity, then you will be included automatically on the organized accounts regime. In this case, your taxable profit will be determined by the terms and rules of the IRC (corporation tax), according to the applicable adaptations.

UWU SOLUTIONS | WWW.UWU.PT | COMERCIAL@UWU.PT3 - HOW YOUR PROFITS WILL BE TAXED | CORPORATE INCOME TAX

3 HOW YOUR PROFITS WILL BE TAXEDCORPORATE INCOME TAX2a) When the Local Accommodation activity is performed by a company, the taxation will be done according to the standard Corporation Tax rules; i.e., a fixed rate of 21 percent will be applied to the profit earned (in case of SME, the first 15,000 euros will be taxed at a rate of 17 percent).

UWU SOLUTIONS | WWW.UWU.PT | COMERCIAL@UWU.PT3 - HOW YOUR PROFITS WILL BE TAXED | VAT

3 HOW YOUR PROFITS WILL BE TAXED

VAT3a) Since the local accommodation activity is regarded as a services provider, it is subjected to VAT at the reduced rate of 6 percent;

b) The VAT rate is applied to the price of the accommodation and breakfast, however, if you choose the simplified regime and if your annual income is inferior to 10,000 euros, you can claim to be exempt from VAT;

c) If you are not exempt from VAT, you will have to pay this tax through a periodic return of VAT, which can be monthly or quarterly whether the activity turnover is superior or inferior to the amount of 650,000 euros. The periodic return is done on the Portuguese Finances Institution website “Portal das Finanças”.

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LOCAL ACCOMMODATION GUIDE ( ALOJAMENTO LOCAL [AL] )