- What is the CAE code
- How the CAE code works
- Who needs a CAE code
- How to obtain the CAE code
- Impact of the CAE code on your business
- Difference Between Major and Minor CAE Code
- CAE code update
- Common mistakes when choosing CAE code
- Tips for Choosing the Right CAE Code
- Advantages of having the correct CAE code
- How the CAE code affects company accounting
- Frequently Asked Questions
The Economic Activities Code (CAE) is a classification system that assigns numerical codes to the various economic activities in Portugal. This code is essential for both companies and self-employed workers, as it allows the identification and regulation of economic activities before the competent authorities. Furthermore, the CAE is essential for the purposes of statistics, taxation and access to tax benefits.
Key Points
- The CAE code is a numerical identifier for economic activities in Portugal.
- It is mandatory for companies and self-employed workers carrying out economic activities.
- The CAE facilitates the regulation and classification of economic activities.
- The correct choice of CAE can positively impact taxation and access to tax benefits.
- The CAE must be updated whenever there are changes in economic activity.
What is the CAE code
Definition of CAE
The CAE code is a record that identifies the field of activity or sector of the company in which you operate, whether in the manufacture or sale of products, or in the provision of services. This code is harmonized with the designations of economic activities in the European Union. It is a numerical code that classifies Portuguese economic activities by field of activity.
Importance of CAE
The CAE is essential for taxation purposes, as it allows the State to identify IRS and IRC taxpayers. Furthermore, it helps the Tax Authority classify the activities of each business, showing the competent authorities what the company does and the scope of its activities. Without an adequate CAE, you may face difficulties in complying with tax obligations and accessing state support.
How the CAE code works
The CAE code is made up of five digits that identify a company's economic activity. This structure is defined by the National Statistics Institute (INE) and is registered in the Portuguese Classification of Economic Activities Information System (SICAE). Each digit has a specific meaning, which helps to categorize the company accurately.
CAE codes are organized hierarchically into activity sectors, groups, classes and subclasses. This organization allows for a detailed and accurate classification of economic activities. Here is an example of how it works:
- Activity sector: Agriculture, Animal Production, Hunting and Related Services
- Group: Agriculture and Animal Production
- Class: Temporary Crops
- Subclass: Cereal farming (except rice)
This hierarchy facilitates statistical analysis and regulation of economic activities in Portugal.
Who needs a CAE code
Companies
If you have a company, you need a CAE code to identify your economic activity. This code is essential for taxation purposes and to access state support. Without a CAE code, your company cannot legally operate in Portugal.
Independent workers
Self-employed workers also need a CAE code. This code allows you to declare your income correctly and comply with tax obligations. Furthermore, the CAE code can help you access specific tax benefits for your activity.
How to obtain the CAE code
Registration process
To obtain your CAE code, you must follow a few simple steps. First, you need to identify the economic activity you are going to carry out. Then, consult the list of CAE codes available on the website of the National Statistics Institute (INE) or in the SICAE database. Choose the code that best describes your activity.
Required documentation
To register the CAE code, you will need some essential documents:
- Citizen Card or Identity Card
- Número de Identificação Fiscal (NIF)
- Comprovativo de morada
- Completed registration form
Make sure all documents are up to date and in good condition to avoid delays in the process.
Impact of the CAE code on your business
Taxation
The CAE code plays a crucial role in taxation of your company. Depending on the code assigned, you may be subject to different IRC and VAT rates. Therefore, it is essential to choose the correct code to avoid unpleasant surprises when paying taxes.
Tax support and benefits
The CAE code is also decisive in access to certain tax benefits and it is what determines the eligibility of companies for certain State support. For this reason, the rigorous recording of activities and their respective codes in finance, through declarations of initiation or change of activity, is essential and should not be neglected.
Pay attention whenever there is any change in the activity you carry out. This is the only way to guarantee that you will not have problems with tax contributions.
Difference Between Major and Minor CAE Code
Main code
The main CAE code is the one that defines your company's main economic activity. It is essential to choose this code correctly, as it will determine how your company will be taxed and what support and tax benefits you can access. This code should reflect the activity that generates the majority of your turnover.
Secondary code
Secondary CAE codes are used to identify other economic activities that your company can develop in addition to the main one. You can have up to 19 secondary CAE codes, which allows greater flexibility and scope in the activities you can carry out. These codes are important to ensure that all your activities are properly registered and taxed.
Having a well-defined main and secondary CAE code helps keep your company organized and in compliance with tax obligations.
CAE code update
When to update
Updating the CAE code may be necessary in various situations, such as changes in the company's main activity or new legal requirements. It is important to keep the CAE code updated to avoid legal and tax problems.
How to update
To update the CAE code, you can follow these steps:
- Access the Finance Portal or go to a Finance office.
- Complete the economic activity change form.
- Submit the request and wait for confirmation.
The change is free and is automatically integrated into SICAE. You can check the update through the SICAE “Notifications” section, available at www.sicae.pt or www.empresaonline.pt.
Maintaining the correct and updated CAE code is essential for the proper functioning and compliance of your company.
Common mistakes when choosing CAE code
Incorrect choice
One of the most common mistakes is the incorrect choice of CAE code. This can happen due to lack of knowledge or not paying due attention to the process. Choosing the wrong CAE can lead to serious problems with the Tax Authority, in addition to complicating the company's internal management.
Consequences of errors
The consequences of choosing the wrong CAE code can be diverse and impactful. Among them, the following stand out:
- Inadequate taxation
- Difficulties in obtaining support and tax benefits
- Problems in accounting
- Fines and penalties
It is essential to invest time in choosing the correct CAE code to avoid future complications and ensure that your business complies with legislation.
Tips for Choosing the Right CAE Code
Industry Analysis
First of all, you must carry out a detailed analysis of the sector in which you are going to operate. This includes understanding the main and secondary activities that your company will develop. Choosing the right CAE can avoid many problems in the future, such as incorrect taxation or lack of access to tax benefits.
Expert consultation
Consulting an accounting expert or business consultant can be an excellent idea. They have the necessary knowledge to help you choose the most appropriate CAE code for your activity.
An expert can provide clearer insight and avoid common mistakes when choosing a CAE.
Remember, choosing a CAE is a crucial step towards the success of your business. Don't underestimate the importance of a well-informed choice.
Advantages of having the correct CAE code
Tax benefits
Choosing the correct CAE code can bring tax benefits significant for your company. Depending on the sector of activity, you may have access to specific tax deductions, exemptions or reduced rates. This can result in considerable savings at the end of the year.
Access to state support
The CAE code is decisive for eligibility for certain State support. With the correct code, your company can apply for subsidies, incentives and other types of financial support that can be crucial to the growth and sustainability of your business.
Having the correct CAE code is essential to maximize tax benefits and access state support that can make a difference in the success of your company.
How the CAE code affects company accounting
Activity log
The CAE code is essential for the correct recording of your company's activities. Without an adequate CAE, you may face difficulties in classifying expenses in e-Fatura. Furthermore, the CAE helps maintain the organization of activities, which is crucial for accounting.
Tax declarations
The CAE also plays an important role in tax returns. It allows the State to identify IRS and IRC taxpayers, ensuring that taxation is carried out correctly. An incorrect CAE can lead to problems with tax contributions, so it is essential to choose the right code from the beginning.
Keeping the CAE updated and correct is vital to avoid tax complications and ensure that your company benefits from all available tax support and benefits.