Reviewing the annual accounts before the financial year-end is a practice that combines prudence and efficiency. Beyond strengthening the reliability of financial information, it allows companies to optimise their tax position and prevent future contingencies. This article technically explains how a timely review can lead to real savings for a company, outlining the Portuguese legal and accounting framework.
1. The importance of an early review
The pre-year-end review of annual accounts consists of a systematic analysis of accounting records and financial statements before closing the financial year, aiming to ensure that all transactions are correctly recorded and aligned with the applicable Portuguese accounting and tax standards.
From an accounting perspective, the review is based on the Accounting and Financial Reporting Standards (NCRF), issued under the Accounting Standardization System (SNC), namely:
- NCRF 4 – Accounting Policies, Changes in Estimates and Errors.
- NCRF 12 – Impairment of Assets.
- NCRF 17 – Provisions, Contingent Liabilities and Contingent Assets.
- NCRF 27 – Financial Instruments.
- NCRF 28 – Employee Benefits.
Conducting this review in the final quarter allows companies to adjust estimates, recognise impairments and provisions, and prepare tax decisions with a direct impact on taxable income, in accordance with the Companies Tax Code (CIRC).
2. Fiscal and financial impacts of the review
An early review can result in tangible fiscal and financial advantages, such as:
a) Correction of material errors
Prevents distortions in results and potential penalties. Under NCRF 4, errors should be detected and corrected in the financial year in which they are identified, reducing the risk of tax adjustments during inspections.
b) Recognition of provisions and impairments
According to Article 34 of the CIRC, tax-deductible provisions (for example, doubtful debt provisions) must be properly documented and justified. Anticipating this work before year-end ensures tax deductibility and a legitimate reduction of taxable profit.
c) Review of depreciation and amortisation policies
Article 31 of the CIRC defines the fiscal acceptance criteria for depreciation and amortisation. A timely review allows alignment of depreciation schedules with the actual economic life of assets and planned investments, avoiding excesses or insufficiencies.
d) Expense deductibility and adjustments
A detailed review of vehicle expenses, travel allowances, financial charges, and other costs subject to fiscal limitations (Articles 23-A, 23-B and 88 of the CIRC) allows correction of records and prevents tax reversals or penalties.
e) VAT adjustments
The pre-year-end review also verifies the proper application of Article 78 of the Portuguese VAT Code, regarding adjustments for bad debts or returns, ensuring the company does not lose the right to deduction due to timing or deadline issues.
3. Complex matters requiring technical analysis
Certain areas demand particular attention during the pre-year-end review:
- Intragroup operations and transfer pricing – verification of supporting documentation as required by Article 63 of the CIRC and Ordinance No. 268/2021.
- Public subsidies and incentives – correct timing of income recognition according to NCRF 22 – Accounting for Government Grants.
- Tax incentives for investment – verification of eligibility under regimes such as RFAI (Tax Incentive for Investment Regime), DLRR (Deduction for Retained and Reinvested Earnings), and SIFIDE II (Tax Incentive System for R&D).
- Fair value adjustments – particularly relevant for financial instruments and biological assets under NCRF 27 and NCRF 17, with direct implications for results and deferred taxation (Article 28-A of the CIRC).
Addressing these issues before the year-end enables efficient tax planning and ensures compliance with Portuguese accounting and legal standards.
4. How Nominaurea can help
Nominaurea has a multidisciplinary team composed of certified accountants and corporate tax specialists who provide technical support in the following areas:
- Interim review of annual accounts, identifying inconsistencies and optimisation opportunities.
- Preventive tax analysis, ensuring expense deductibility and proper asset valuation.
- Verification of eligibility for tax incentives, ensuring compliance with legal requirements.
- Assistance in preparing the IES and tax file, under Article 121 of the CIRC and Ordinance No. 35/2019.
- Advisory in communication with the Portuguese Tax Authority, reducing the risk of corrections and contingencies.
Through a technical, preventive and results-oriented approach, Nominaurea transforms the pre-year-end review into a strategic tool for efficiency, compliance, and tax savings.
The early review of annual accounts is more than a control procedure: it is a smart investment that ensures the reliability of financial information, reduces tax risk, and promotes responsible management.
By identifying and correcting inconsistencies before year-end, a company gains predictability, saves resources, and strengthens its position with investors, lenders, and the Portuguese Tax Authority.
Nominaurea stands as a trusted partner in this process, combining technical accuracy, tax expertise, and strategic insight to help Portuguese businesses achieve sustainable and tax-efficient results.
