The deadline for small-scale farmers to register their activities with Finanças and social security which ended last Friday has been extended for the fourth time, this time to April 30th 2014.
"The judgment of the Court of Justice of the European Union, March 2012, judged the VAT licensing scheme for small farmers in Portugal contrary to the VAT Directive. Portugal then withdrew the proposed scheme, replacing it with its general VAT regime applicable to all economic agents,' according to a statement from the Ministry of Finance.
The government now considers it 'appropriate that an additional period is granted for all small farmers to deliver their statements of activity as the government is still in time to apply for aid from the European Union.’
The statement emphasised that ‘small farmers whose annual turnover does not exceed €10,000 will continue to benefit from a VAT exemption scheme, similar to other traders.’
In October 2013 the deadline was extended to January 31 2014 with the government justifying the postponement due to 'various issues' that the imposition of the general VAT regime would entail.
One of the 'various issues' is that many affetced by the fiscal regime are subsistence farmers and do not earn enough to pay tax. With the expense of €65 for an official receipt book, and with each receipt costing 70 cents, they are likely to make a loss on many sales.
No word yet from the Agricultural Minister but an extended deadline will give Assunçao Cristas some time to come up with an equitable solution that will see traditional farmers treated with fairness and respect.
