Hello.
I know you’re reading this with that mixture of excitement and terror that comes with every new beginning. You’ve just realised you can work for yourself, and then someone mentioned words like “VAT”, “simplified regime” and “quarterly declaration” and the excitement gave way to a fog of confusion.
I’m writing to you from three years in the future. And I have a few things to tell you.
1. The system is simpler than it looks
The first time I heard “simplified regime”, I imagined something complicated. In practice it’s the opposite: the simplified regime exists because it’s simple.
Your taxable income is calculated automatically: for most services, you multiply what you’ve invoiced by 0.75. That’s the coefficient the state applies. No organised accountancy, no balance sheets, no profit and loss statements.
The obligations are four quarterly declarations and one annual one. Each has a fixed deadline. If you know those deadlines, you’ve done half the work.
2. Open your activity sooner than you think necessary
I waited. I thought: “I’ll wait and see how this goes.” While I waited, I worked without issuing invoices. When I finally opened my activity, I had to regularise months in arrears.
Want to know what was hardest? Not the regularisation. It was discovering that in the first year of activity there’s a Social Security exemption I’d missed — because I started counting the “first year” from when I opened, not from when I started working.
Open your activity on the day you decide to take this seriously. The process is free, online, and takes 20 minutes.
3. The tax authority isn’t the enemy
You’ll receive notifications. Sometimes they’re confusing. Sometimes they’re about mistakes you made.
What I didn’t know: tax authority notifications are always the first step — not the last. Before any fine, there’s a notification. Before the maximum fine, there’s a minimum fine. And when you correct things on your own initiative, the penalty is much lower.
Respond to notifications. Within the deadline. That’s all you need to do.
4. Keep your documents — but you don’t have to keep paper
You need to keep receipts, expense invoices, and declaration confirmations for four years. But “keeping” doesn’t mean a physical folder full of paper.
A photo of a receipt is sufficient for tax purposes. A Google Drive folder organised by year works perfectly.
And the invoices you issue? They’re automatically saved in the AT’s e-fatura system. You don’t need to keep anything.
5. Quarterly returns aren’t the monster they seem
The first time I did a quarterly VAT return, it took me 47 minutes. I took screenshots of every step because I was afraid of making a mistake.
The second time: 22 minutes.
The fifth time: 11 minutes.
Today I do them from memory. The form hasn’t changed — I have.
6. What I wish I’d invested in at the start
Instead of spending the first months in panic and paying an accountant for things I could have done myself, I wish I had:
- Spent an afternoon reading about simplified regime obligations
- Set calendar reminders for the four quarterly declarations
- Used certified invoicing software that reminded me of deadlines
Tax knowledge isn’t a prerequisite for starting. It’s a consequence of starting.
7. It’s going to be fine
Not perfectly. You’ll make mistakes — everyone does. At some point you’ll realise you filled in a field wrong, or missed a deadline, or didn’t know about a rule.
You won’t be ruined. You won’t go to prison. You’ll regularise, pay a small fine if necessary, and carry on.
What matters is not giving up out of fear of making mistakes.
The most important thing: What you’re about to do is possible. Thousands of ordinary people, without any finance training, manage their own tax affairs every year in Portugal. They can make mistakes and correct them. They can not know everything and learn as they go. They can start today.
✅ In summary
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The simplified regime is simple by design. You don’t need to understand organised accountancy to manage it. You need to know four deadlines and how to issue invoices.
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Starting early protects you. Regularising late situations is possible, but more work and more expensive than keeping things up to date from the start.
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With FIZ tax obligations are automated — for your past self who just wanted to work without thinking about declarations.
