Accounting and tax concepts, explained clearly.

A document supporting the recording of a transaction. Invoices, receipts, statements and contracts can support different entries.

Amounts owed by the entity to suppliers, the State, employees or other creditors.

Amounts invoiced or owed to the entity that have not yet been received. They can increase the result without immediately increasing the bank balance.

Recognition, in the correct period, of income or an expense not yet invoiced or paid. For example, a December expense may be recognised in December even if it is only invoiced later.

VAT exemption regime applicable to taxable persons who meet the legal requirements in force. Those covered do not charge VAT on the transactions concerned and cannot deduct the tax incurred.

A resource controlled by the entity from which future economic benefits are expected. Money in the bank, amounts receivable, inventory and equipment can all be assets.

Financial statement presenting assets, liabilities and equity at a given date, showing the financial position of the entity.

A comparison between bank movements and accounting records in order to identify differences and missing documents.

The fixed contractual amount used as the basis for payroll processing, excluding variable components.

The code identifying the main economic activity and, where applicable, the secondary activities of an entity.

Money coming in and going out over a given period, including receipts from customers and payments to suppliers.

The personal income tax category covering, in general, business and professional income earned by freelancers and sole traders.

A professional qualified and registered with the Order of Certified Accountants to take on the functions provided for in law.

A percentage applied to certain income under the simplified regime in order to determine taxable income. It depends on the nature of the income and does not equate to a deduction of actual expenses.

An amount due to Social Security under the applicable contributory framework.

A record of the movements and balance held with an entity, such as a customer or supplier. It helps identify which invoices are paid, outstanding or still to be reconciled.

The future recognition of income or an expense already invoiced or paid, where it relates to another period.

The gradual recognition of the cost of certain assets over their useful life.

The Monthly Remuneration Declaration reported to the Tax Authority with payroll and tax information.

The residual value of assets after deducting liabilities. It includes, among other items, capital and retained earnings.

The Simplified Corporate Information return, which aggregates annual accounting, tax and statistical information. It is distinct from the Modelo 22 return.

Financial statement presenting the income, the expenses and the result of a period.

Goods held for sale, production or consumption in the production process. Stock at year end must be counted and appropriately valued.

Present obligations of the entity, such as loans, suppliers and taxes payable.

The ability to have financial means available to meet short-term commitments.

The annual periodic return used to assess corporate income tax, based on the accounting information and the applicable tax adjustments.

The Legal Person Identification Number attributed to the entity and used for tax and administrative identification.

A regime in which income is determined on the basis of full accounting records, ensured by a Certified Accountant, with the recording of income, expenses, assets and liabilities.

Money going out to settle an obligation or acquire a good or service. It may occur in a different period from the one in which the expense is recognised.

A document itemising pay, deductions and the net amount for an employee in a period.

The positive result obtained when income exceeds the expenses of a period. It does not necessarily correspond to the money available.

The Central Register of Beneficial Owners, which identifies the individuals who control an entity.

Money coming in associated with the settlement of a sale, a credit or another right.

The value of the contributions undertaken by the shareholders when the company is incorporated or altered. It should not be confused with the personal money available to the shareholders.

A regime for determining the taxable income of certain independent activities through coefficients and rules set out in the personal income tax legislation.

The Accounting Standardisation System, which brings together the frameworks, models and standards applicable to financial information in Portugal.

The declaration by which the beginning of an activity and its framework are reported to the Tax Authority.

An organised set of documents and information supporting the tax assessment for the financial year.

The income base subject to tax after applying the determination rules provided for in law.

The management of available money, receipts, payments and short-term financial needs.

A working schedule presenting the movements and balances of the accounting accounts. It can show sales, expenses, banks, customers, suppliers and taxes for a given period.

An advance payment of tax made when certain income is paid, and taken into account in the final settlement.

The relationship between short-term resources and commitments, used to assess the ability to finance current operations.