Switching from Organized Accounting to the Simplified Tax Regime in Portugal

A Practical Guide for Freelancers and Independent Professionals

For many freelancers and independent professionals in Portugal, choosing the right tax regime can significantly influence administrative workload and overall tax efficiency.

One question we frequently receive at GoalSeek is the following:

Can a taxpayer move from the organized accounting regime to the simplified regime without cancelling their activity?

The answer is yes, provided certain legal conditions are met and the change is requested within the correct deadline.

This article explains how the transition works, who qualifies, and the key procedural steps involved.

Understanding the Simplified Tax Regime in Portugal

The simplified tax regime is designed for self-employed individuals and freelancers with relatively moderate levels of income. Instead of calculating taxable profit based on detailed accounting records, the tax authorities apply standardized coefficients to determine taxable income.

This system reduces administrative complexity and is often preferred by:

freelancers
consultants
digital professionals
small service providers

Under Portuguese tax law, the simplified regime can generally be applied when annual gross income from self-employment does not exceed €200,000 in the previous year.

If this threshold is respected and no other legal obligation requires organized accounting, the taxpayer may opt for the simplified regime.

When Can You Switch to the Simplified Regime?

A taxpayer currently taxed under organized accounting by choice may return to the simplified regime.

However, the request must be made within a specific legal deadline.

Key rule

The change must be submitted through a declaration of changes (“declaração de alterações”) by the end of March of the year in which the taxpayer wishes the new regime to apply.

If the declaration is submitted within this period:

The simplified regime becomes effective for that same year
Taxable income will be determined according to simplified regime rules from that point forward

Example:

If income in 2025 is below €200,000
The taxpayer may request the simplified regime by 31 March 2026
The simplified regime will apply starting in 2026

Important Clarification: Accounting vs. Tax Regime

Many taxpayers confuse two different concepts:

Having organized accounting
Being taxed based on accounting results

These are not necessarily the same.

Understanding the distinction is essential.

1. Having Organized Accounting

Organized accounting simply means that the taxpayer maintains a formal accounting system compliant with commercial and tax standards.

This may occur because:

it is legally required
the taxpayer opted for it voluntarily
it is maintained for internal financial management

However, maintaining organized accounting does not automatically mean the taxpayer must be taxed under that regime.

It is possible for a professional to maintain accounting records while still being taxed under the simplified regime.

In that situation, taxable income is not determined from accounting profit.

Instead, it is calculated using the standardized coefficients applied to gross income.

2. Being Taxed Based on Accounting

When a taxpayer is taxed under the organized accounting regime, taxable income is determined based on:

accounting profit
adjusted for fiscal corrections defined under Portuguese tax law

In practice, this means:

revenues and expenses must be fully documented
the calculation of taxable income follows formal accounting principles
tax reporting becomes more complex

This regime may apply because:

the taxpayer exceeded legal income thresholds
or the taxpayer opted for this regime voluntarily.

How to Request the Change of Regime

If the taxpayer wishes to move from organized accounting to the simplified regime, the request must be submitted through the Tax Authority portal (Portal das Finanças).

The process is completed via the activity change declaration.

Two sections are particularly relevant:

Section regarding accounting information

This section identifies whether the taxpayer has organized accounting and, where applicable, the certified accountant responsible.

However, completing this section alone does not change the tax regime.

Section for the taxation regime option

This section determines the effective tax regime applicable to the activity.

For the simplified regime to apply, the correct option must be selected in this section when submitting the declaration.

Why Many Freelancers Consider Switching

In practice, freelancers may consider switching to the simplified regime when:

their income decreases
administrative costs become too high
accounting complexity is no longer justified
the simplified coefficients produce a similar or lower taxable base

For many independent professionals, this transition can significantly reduce compliance costs and administrative burden.

However, each case should be evaluated individually.

Factors such as:

income structure
business expenses
international income
social security implications

can influence whether the simplified regime is actually advantageous.

Professional Guidance Is Often Recommended

While the procedure itself is relatively straightforward, the tax impact of changing regimes can be significant.

Before submitting the change, it is advisable to review:

expected income levels
deductible expenses
international income sources
social security contributions
long-term tax planning considerations

A careful review ensures the chosen regime aligns with both tax efficiency and compliance requirements.

How GoalSeek Supports Freelancers and International Professionals

At GoalSeek, we assist freelancers, consultants, and international professionals living in Portugal with:

tax regime optimization
freelancer registration and activity changes
cross-border tax structuring
compliance with Portuguese tax and social security rules

Our team works extensively with expatriates and remote professionals earning income from abroad, ensuring their tax structure in Portugal is both compliant and efficient.

Disclaimer

The information provided in this article is intended for general informational purposes only and does not constitute formal tax advice. Portuguese tax legislation is subject to interpretation and change. Specific situations should always be reviewed individually before making tax decisions.