In Portugal, individuals have two main options for reporting their financial data to tax authorities: simplified/non-organized accounting and organized accounting. This decision significantly influences the calculation of freelancer income at the end of the year. If you're self-employed, a freelancer, or an individual contractor in Portugal, you can choose between two accounting regimes. However, any type of company, including anonymous or joint stock, must use an organized accounting regime. Once your gross annual income surpasses €200,000, both freelancers and sole proprietorships must adopt organized accounting. If you initially opt for the simplified plan, your turnover must not exceed €200,000 over two consecutive years or increase by more than 25% within one year. Failure to comply may result in fines, and you'll be required to switch accounting systems. Organized Accounting: Income tax calculation considers only the annual gross income. Business expenses are deductible. A certified accountant (TOC) must be hired. Annual preparation, presentation, and classification of accounts are required. Simplified Accounting: Tax calculation involves only a percentage of the income. Work expenses cannot be deducted. There are fewer tax obligations and associated expenses with this plan. Today, let's delve into Non-Organized Accounting.
