What happens if you don't pay a debt to the tax authorities?

If you do not pay your debt to the Tax Office, seizures and the end of tax benefits may be at stake.

According to DECO PROteste, if you have a debt to the tax authorities, you should pay it immediately or renegotiate installments, as "if there are debts you must not fail to pay, they are those referring to taxes." Source: Notícias ao Minuto

What happens if you can't pay your debt to the tax authorities right away?

If the fiscal debt is not paid soon, the tax execution process begins: "The taxpayer receives, by letter, a seizure of assets alert (bank accounts, real estate, cars or jewelry, for example). It is therefore advisable that the fiscal domicile is always up to date," it can be read.

"With or without notice, assets are seized and later sold by the Treasury. Owner-occupied houses can also be seized, although the Treasury cannot sell them," explained the organization.

If there are no seizable assets, "the process is suspended after three months, but the debt is not forgiven", it only waits for the Tax Authority to detect new assets. In addition to the seizure, taxpayers also cease to enjoy any tax benefits (such as retirement savings plan or expenses with VAT benefit), continues.

Furthermore, "unless otherwise provided by law, the payment of any tax or other tribute to the State prescribes at the end of eight years. However, the right to collect expires if the taxpayer is not notified to pay within four years. The time from which this period is counted may vary, and the counting of time may be interrupted, for example, by the challenge of the debt, among other situations".  

Finally, "if there is any illegality in the collection, consider filing a gracious complaint - it is free and simple. Still, it only has a suspensive effect if a guarantee is provided or waived. As a last resort, resort to arbitration or the court," clarifies DECO.

How to pay a debt to the Tax Authority?  

To pay the debt to the Tax Authority within the payment deadline, you can do so through online banking, at ATMs, at banking institutions, at the post office, or at any treasury of the Tax Services.

DECO explains that a good option may be to activate the direct credit possibility, with no associated costs, allowing "taxes to be paid before the deadline". "The billing date is communicated to you by mail approximately 15 days in advance. Direct debit can be canceled at any time. Just access your personal area on the Finance portal, choose Services > Direct Debit > Make an adhesion request".

There are three payment options, from one month payment to installment payment request, and delivery of goods to substitute for debts.

In the case of debts to the IRS, it may be different, as warned by the consumer defense association.

Debts of equal or less than 5 thousand euros can be paid in installments, without guarantee, if not a debtor of other taxes. However, the number of installments must be equal to or less than 12.

The association clarifies that a maximum of 36 monthly installments are allowed, with a minimum value of one quarter of 25.50 euros - that is 6.35 euros.

To pay in installments, the request must be made on the Finance Portal, considering that the first installment must be made in the month following the notification of the payment plan.  

Learn more about taxes, savings, credits, and insurance by following the Poupança no Minuto.