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Providing More Proof – Companies reporting losses are targeted
Portugal, like other countries, is constantly battling tax fraud and tax evasion, and authorities are now targeting those companies that have recurring losses.
• a balance sheet total of not more than EUR 500,000;
• a net turnover of not more than EUR 500,000;
• not more than an average of 5 employees during the financial year.
The company in need of an SA in accordance with this decree will have to inform the Institute of the Statutory Auditors which will appoint an SA to be responsible for certifying the financial statements for the tax period in question and to attest to the reasonableness of the accumulated tax losses. Should the SA come to the conclusion that such accumulated losses are unreasonable, tax authorities may correct previous tax returns. The main purpose of this law is obviously to make fraud less appealing. Nonetheless, for those companies that are really facing economic and financial crisis it will also cost them more to prove it, as SA’s fees in Portugal are usually quite high. In a way, the law is putting an extra burden on the innocent in order to find the guilty.
Author: Fátima Gouveia, Ecovis Comark, Lda. Oporto, Porto, Portugal
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