Invoicing for villa rental

[Sheila]

We are going to let our villa for the first time this year. We have a manager who says we have to purchase an Invoice Book in which she will raise an invoice in Euros to enter into the financas online system. We were planning to raise a PayPal invoice in sterling as a simple method of allowing payment by either debit or credit cards. She seemed to think this would cause some accounting problems raising two invoices for one transaction but I don't see another way of allowing payment by debit/credit card in sterling. How do other private renters deal with this situation?

[bjay]

Hi Sheila
I've sent you a pm

[Sheila]

I haven't received a PM. Does it take long to arrive?

[RichardHenshall]

You will need to establish a euro-denominated value for each transaction by a consistent method (I just transfer the Sterling amount to euros using TransferWise when I get paid and use that) and once you've done that, you can just issue an online invoice at https://irs.portaldasfinancas.gov.pt/recibos/portal/. There's no need to have paper invoices if you do it online.

[Sheila]

That sounds simple enough for the Portuguese tax system. Except I don't want to send all the money to my Portuguese account. Is it ok if I just get the figure from TransferWise but don't actually continue with the transaction as then there will be no record of the exchange rate.

As far as the English customer is concerned do you offer a credit card facility and a sterling invoice or receipt?

[RichardHenshall]

So far I've got away without needing a card facility and have survived with bank transfers only. However our rental efforts have reduced in recent years for a variety of reasons.

I'm sure there's an official way of fixing the exchange rate but for all the difference it makes I think the Portuguese tax man will be happy that you're paying tax at all! I don't send the invoice raised on the Portal das Finanças to anybody and only a renter who was Portuguese resident would ever be able to see what I invoiced (because you have to use their Fiscal No, in that instance).

Remember that you have to worry about registration for IVA, once you exceed €10,000 per annum.

[Sheila]

Hi Sheila
I've sent you a pm

Still haven't received it.

[bjay]

Hi Sheila
It's left my outbox so you should get it soon.

[Sheila]

Hi Sheila
It's left my outbox so you should get it soon.

Thank you. I have it now.

[Farol]

Am I missing something here? It sounds as though you are over complicating things. Yes Paypal is a good way of receiving payments and it gives your renters options in how they can pay including credit/debit cards but whatever currency you invoice in if it differs to your renters normal currency than both Paypal and their cards give the option to pay in the invoiced currency or to convert to another and pay in that - they would provide you with an audit trail showing that you have received the full amount which should agree with the amount entered into the Financas system. It shouldn't be an issue to your renters assuming you invoiced in euros as they would see the euro amount and the amount it gets converted to if they opt to pay in sterling. You can move the money in your Paypal account to wherever you wish regardless.

As a slight aside the inference is that you will only rent to people paying in sterling - that seems commercially limiting.

[Sheila]

You will need to establish a euro-denominated value for each transaction by a consistent method (I just transfer the Sterling amount to euros using TransferWise when I get paid and use that) and once you've done that, you can just issue an online invoice at https://irs.portaldasfinancas.gov.pt/recibos/portal/. There's no need to have paper invoices if you do it online.

I'm trying to issue my first online invoice and i'm a bit stuck on what option to choose in the following cases.

Regime de IVA

Base de incidência em IRS

Retenção na fonte IRS


Any help gratefully received.

Thanks

[RichardHenshall]

This is what I did:

IVA:

It depends if you're registered for IVA yet. If not, 'IVA - regime de isenção [art.º 53.º]' and if so, 'Continente - 6% [taxa reduzida atual]'.

IRS:

If your customer is a Portuguese resident this may get complicated as you may have to deal with your client retaining some of your money - I can't help with that. If your customer is non-resident then you choose 'IRS : Sem retenção - Não residente sem estabelecimento'.

[Sheila]

ok. Thanks

I wasn't sure whether to choose Fatura or Fatura ou Recibo. The last 2 options only appeared when i chose Fatura ou Recibo so i guess i can forget that and just use the Fatura option when i only have to worry about the IVA .

[RichardHenshall]

I've only ever issued a fatura/recibo combined. If you only issue a fatura I think you'll have to later issue a recibo when you get paid.