Lisbon GMT +1
EY
Edifício Allo
Avenida da Índia, n.º 10 1st Floor 1349-066
Lisbon Portugal
Indirect tax contacts
Amilcar Nunes
+351 217 912 218 amilcar.nunes@pt.ey.com
Ana Luisa Basto +351 217 912 258 ana.luisa.basto@pt.ey.com
Catarina Anjo Balona +351 217 912 267 catarina.balona@pt.ey.com
Gonçalo Tavares +351 211 542 986 goncalo.tavares@pt.ey.com
João Ribeiro +351 217 912 083 joao.ribeiro@pt.ey.com
Carolina Nery +351 211 599 904 carolina.nery@pt.ey.com
Porto GMT +1
EY
Avenida da Boavista, 36 3rd Floor 4050-112 Porto
Portugal
Indirect tax contact
Liliana Pinheiro
+351 226 079 629 liliana.pinheiro@pt.ey.com
Sara Azevedo +351 211 542 997 sara.azevedo@pt.ey.com
A. At a glance
Name of the tax
Value-added tax (VAT)
Local name Imposto sobre o valor acrescentado (IVA)
Date introduced 1 January 1986
Trading bloc membership European Union (EU)
Administered by Autoridade Tributária e Aduaneira (Tax and Customs Authority) (http://www. portaldasfinancas.gov.pt) VAT
Reduced
Other Exempt and exempt-with-credit
Autonomous region of Madeira
since October 2024 (previously 5%) Autonomous region of Azores
VAT return periods
Monthly
If the turnover in the preceding VAT year was equal or exceeded EUR650,000
Quarterly If the turnover in the preceding VAT year did not exceed EUR650,000
Annual
Thresholds
Registration
Established
All taxable persons that performed any taxable operations
None (unless a one-off taxable event less than EUR25,000)
Non-established None
Distance selling
EUR10,000
Intra-Community acquisitions None
Electronically supplied services
Recovery of VAT by non-established businesses
B. Scope of the tax
EUR10,000
Yes, subject to certain conditions
VAT applies to the following transactions:
• The supply of goods or services made in Portugal by a taxable person
• The intra-Community acquisition of goods and services in Portugal from another European Union (EU) Member State made by a taxable person (see the EU chapter)
• Reverse-charge services received by a taxable person in Portugal
• The importation of goods from outside the EU, regardless of the status of the importer
For VAT purposes, the territory of Portugal includes the autonomous regions of Azores and Madeira. However, special VAT rates apply to supplies made in these islands.
Quick Fixes. Law no. 49/2020 of 24 August 2020 was published, aiming to harmonize and simplify certain rules in the VAT system for intra-Community trade, transposing the Council Directives 2018/1910 of 4 December 2018 and 2019/475 of 18 February 2019 and amending the VAT Code, the VAT Regime for Intra-Community Transactions (RITI) and the Excise Duties Code. For documentary requirements see Section H. Invoicing, subsection Proof of exports and intraCommunity supplies.
The referred law applies with retroactive effect as of 1 January 2020 (but taxable persons are given the possibility to comply with the tax obligations by 31 December 2020) and introduces into the Portuguese legal system three of the four measures of the legislative package of
C. Who is liable
A taxable person is any business entity or individual that makes taxable supplies of goods or services or intra-Community acquisitions or distance sales (once the threshold is exceeded) in the course of a business in Portugal.
No VAT registration threshold applies in Portugal (except for one-time taxable events, under EUR25,000). A taxable person that will begin its activity must notify the tax authorities of its liability to register.
Special VAT registration rules apply to foreign or “non-established” businesses.
Exemption from registration. Although the supply of a single operation is, by rule, a taxable operation, article 31 (3) of the VAT Code provides that the statement of beginning of activity does not need to be submitted (i.e., there is no need to proceed with the VAT registration) where the single taxable transaction does not exceed EUR25,000.
Voluntary registration and small businesses. The VAT law in Portugal does not contain any provision for voluntary VAT registration. Nonetheless, if a taxable person incurs expenses within Portugal, it may opt to register for VAT in Portugal if it has output tax related to its operations. This option may be chosen due to the fact that a VAT refund claim may otherwise be very time consuming. For further details see the Recovery of VAT by non-established businesses subsection below.
Group registration. Group VAT registration is not allowed in Portugal. Holding companies. In Portugal, a pure holding company cannot be a member of a VAT group, as group VAT registration is not available in Portugal.
Cost-sharing exemption. The VAT cost-sharing exemption (in accordance with VAT Directive 2006/112/EEC article 132(1)f) has not been implemented in Portugal).
Fixed establishment. The Portuguese VAT legislation does not provide a definition of “fixed establishment” (FE) for VAT purposes; this means that article 11 of Council Implementing Regulation no. 282/2011 must be analyzed for these purposes, since the Portuguese tax authorities (PTA) have adopted for VAT purposes the same definition of “fixed establishment” that is stated in article 11. In short, a foreign business is deemed to have a fixed establishment for VAT purposes in Portugal in the following circumstances:
• Existence of a physical installation (suitable structure) – fixed place of business through which the business of the enterprise is wholly or partly carried on by a dependent of the company
• Existence of human and technical resources within the physical installation
• A certain degree of permanence to carry out taxable operations in Portugal (i.e., the FE should be lasting or continuous, as opposed to occasional or temporary)
In view of the above, the PTA considers that in the absence of a fixed/physical establishment/ facility with a minimum consistency that demonstrates an appropriate level of human and technical resources, capable of receiving and providing services, a nonresident taxable entity should not be considered to have a FE in Portugal.
Usually, the PTA understands that whenever a permanent establishment (PE) exists for corporate taxation (CIT) purposes, then, such establishment also exists for VAT purposes. In fact, in these situations, the authorities, make no difference in the treatment of the entity for PE (CIT) or FE (VAT) purposes, which implies that the same company tax identification number is both used for CIT and VAT purposes.
Non-established businesses. A “non-established business” is a business that is not VAT registered nor has a fixed establishment in the territory of Portugal. A non-established business that makes supplies of goods or services in Portugal must register for VAT if it is liable to account for Portuguese VAT on the supplies or if it makes intra-Community supplies or acquisitions of goods (except when the call-off stock simplification rules apply, refer to such comments under the Quick Fixes subsection above).
The reverse-charge mechanism applies generally to supplies made by non-established businesses to Portuguese taxable persons. Under the reverse-charge provision, the taxable person that receives the supply must account for the Portuguese VAT due. If the reverse charge applies, the non-established business is not required to register for Portuguese VAT. The reverse charge does not apply to supplies to private persons or to nontaxable legal persons. Consequently, nonestablished businesses must register for Portuguese VAT if they make any of the following supplies:
• Intra-Community supplies or acquisitions (see the EU chapter)
• Distance sales in excess of the threshold (see the EU chapter)
• Supplies of goods and services that are not subject to the reverse charge
Tax representatives. Businesses that are established in the EU are not required to appoint a tax representative to register for VAT in Portugal. However, EU businesses may opt to appoint a tax representative if they wish to do so.
Businesses that are established outside the EU (including the United Kingdom) must appoint a resident tax representative to register for Portuguese VAT. The tax representative is the first entity deemed responsible for the payment of the VAT debts with the business represented by it.
However, a nonresident entity, with head office or established in a third country, registered for VAT purposes in Portugal that intends to cease activity must appoint a Portuguese tax representative established or resident in Portugal. This rule is aimed at ensuring payment of any outstanding tax that may be levied after the cancellation of the activity. Thus, the tax representative is jointly and severally liable for the payment of VAT since its appointment and until the company duly cancels its activity near the competent authorities
Under the recent Ruling no. 30235 of 27 April, the appointment of a tax representative for mere Portuguese VAT registrations (who are entities incorporated or established within the EU, otherwise it would be mandatory) continues to be optional and not mandatory. However, by appointing such representative, such mere Portuguese VAT registrations may continue to charge local VAT when selling goods to entities incorporated, established or who are mere Portuguese VAT registrations in Portugal.
Where a tax representative is not appointed, business-to-business (B2B) Portuguese local supplies shall be subject to the domestic reverse-charge mechanism (article 2(1)(g) of the Portuguese VAT Code), thus, local output invoices must be raised without VAT.
Where a tax representative is appointed, the supplier who is a mere Portuguese VAT registrant may continue to charge/report/assess local VAT in its local B2B supplies but must prior to the raise of such invoices communicate to the B2B acquirers that a tax representative was appointed.
Reverse charge. In cross-border B2B supplies of services, the acquirer of the service (taxable person) should apply the reverse-charge mechanism and self-assess the VAT due on such operation.
Domestic reverse charge. The reverse-charge mechanism is also applicable in the following situations, in which the taxable person, to whom supplies of goods or services are rendered, becomes liable for the payment of VAT:
• Supplies of ferrous waste and scrap, residues and other recyclable materials consisting of ferrous and nonferrous metals to a Portuguese taxable person
within one Member State, as well as intra-Community shipments. In both cases, the final customer must be a nontaxable person.
In Portugal there are no additional specific local rules that apply.
For more details about the rules for online marketplaces, see the EU chapter. Vouchers. A “single-purpose voucher” (SPV) is a voucher for which all the elements necessary for determining the tax due, regardless of the good or service to be supplied, are known at the time of issue or assignment.
For SPVs, VAT shall be due and payable at the time the voucher is issued/assigned by the taxable person in whose name the transfer of the voucher is made. On the other hand, a “multipurpose voucher” (MPV) is a voucher for which, at the time of issue or assignment, all the information necessary to determine the tax due is not known.
For MPVs, VAT shall be due and payable at the time the taxable person supplies the goods or services that the voucher relates to, regardless of any assignments that may have previously occurred.
Registration procedures. Entities must register with the National Register of Corporate Entities (Registo Nacional de Pessoas Coletivas – RNPC), as well as with the local tax office. A certificate of legal standing of the company must be filed with the registration application form. The company is provided with a Portuguese corporate registration number within 10 working days. This number will be the same as the VAT registration number once the company files for a declaration of beginning of activity, together with other relevant documents, with the competent tax office.
The registration of a non-established business for VAT purposes in Portugal may take up to 10 working days. Before the VAT number is obtained and is duly activated near the local tax office, it cannot be used for any output or input purposes. An online VAT registration system is not yet full in force in Portugal. Entities must register with the RNPC in person. Registration with the local tax office may be performed electronically exceptionally and subject to confirmation, through the PTA website.
The following documentation is required to proceed with the Portuguese VAT registration of a company not established in Portugal:
• Certificate of incorporation issued within the last three months and duly apostilled with the Hague Convention seal. A Portuguese certified translation is required.
• Company’s articles of association issued within the last three months and duly apostilled with the Hague Convention seal. A Portuguese certified translation is required.
• Certificate of status of taxable person proving that the company is a taxable person in the country where it has its head office, issued within the last three months and duly apostilled. A Portuguese certified translation is required.
• The company’s international bank account number (IBAN) and BIC/SWIFT number – for this purpose the applicant should provide official declaration from the bank where the company holds its bank account, provided it is from an EU bank account.
• Power of attorney (PoA) duly apostilled with the Hague Convention seal and issued within the last three months, empowering another business to represent and act on behalf of the company in the process of requesting its registration at the National Register of Companies (Registo Nacional de Pessoas Coletivas – RNPC).
• Copy of identity card/passport of the person who has powers to solely bind the company (e.g., legal representative, when applicable) for PoA purposes.
• Declaration of beginning of activity signed by the person who has powers to solely bind the company (e.g., legal representative) or if applicable, by the tax representative appointed by the company. This form needs to be printed on both sides and signed in duplicate.
Other information required for the declaration of beginning of activity: (1) identification of the operations to be carried out in Portugal (imports, exports, intra-Community acquisitions or supplies – yes/no), (2) company’s business activity code (usually designated across Europe as CAE, NAFT or NACE code), (3) estimated annual turnover in euro and (4) confirmation of the exact date of the beginning of activity in Portugal.
It should be possible to backdate the VAT registration date to the beginning of activity, but only upon Portuguese tax authorities and/or local tax office confirmation to accept the backdate of registration (subject to a case-by-case analysis). Penalties for late VAT registration and any other missing reports and payments might then apply.
Following recently enacted legislation for the prevention of money laundering and terrorism financing, all entities that obtain a Portuguese taxable person number are required to submit an online form containing information about that entity and about its ultimate beneficial owner(s) (UBO) and management.
Deregistration. Individuals or companies subject to VAT must, within 30 days from the date of termination of activity, submit a declaration of cancellation of activity with the competent tax office.
Tax authorities can declare, on their own authority, the termination of activity of a company following a judgment under insolvency proceedings determining the winding-up of the company, when it is clear that an economic activity is not being developed or intended to continue to be developed.
Changes to VAT registration details. When there is a change in a taxable person’s VAT registration details (such as name, address, starting/stopping to make imports, exports or intra-Community acquisitions or supplied, inter alia), the taxable person is obliged to inform the tax authorities of such changes through the submission of a declaration of changes of activity. This can either be made in person or online, via the company’s web portal with the PTA.
D. Rates
The term “taxable supplies” refers to imports and supplies of goods and services that are liable to a rate of VAT.
The VAT rates in mainland Portugal are:
• Standard rate: 23%
• Intermediate rate: 13%
• Reduced rate: 6%
The standard rate of VAT applies to all supplies of goods or services, unless a specific measure provides for the intermediate rate, the reduced rate or an exemption.
In the autonomous region of Madeira, the following VAT rates apply:
• Standard rate: 22%
• Intermediate rate: 12%
• Reduced rate: 4% since October 2024 (previously 5%)
In the autonomous region of Azores, the following VAT rates apply:
• Standard rate: 16%
• Intermediate rate: 9%
• Reduced rate: 4%
Examples of goods and services taxable at 6% (4% in Madeira since October 2024 and 4% in the Azores)
• Basic foodstuffs
Supply of medical and sanitary services performed by hospitals, clinics, dispensaries and similar establishments, which are not carried out by entities from the public sector, i.e., entities that do not have any agreement with the State
– Supplies of services rendered by non-agricultural cooperatives to their farmer members In the above cases, if the taxable person opts to waive the VAT exemption, it must remain under this regime for five years.
• Leasing or supply of immovable property or independent parts thereof to other taxable persons: In this case, the waiver of the exemption must be carried out on a case-by-case basis and supported by a certificate issued by the PTA.
E. Time of supply
The time when VAT becomes due is called the “time of supply” or “tax point.” The basic time of supply for goods is when they are delivered. The basic time of supply for services is when they are performed.
An invoice must be issued before the fifth business day following the basic time of supply. The actual tax point becomes the date on which the invoice is issued. However, if no invoice is issued, tax becomes due on the fifth business day after the basic tax point.
If the consideration is paid in full or in part before the invoice is issued, the actual tax point becomes the date on which payment is received (with respect to the amount paid). The VAT invoice must be issued immediately in these circumstances.
Deposits and prepayments. For prepayments or advance payments, the tax point is the date on which the advance payment is received. The supplier must issue an invoice as soon as an advance payment is received.
Continuous supplies of services. Regarding continuous supplies of services based on agreements foreseeing successive payments, the time of supply occurs at the end of the period concerning each payment. However, where the payment schedule is not defined or is greater than 12 months, the VAT is due and shall become chargeable at the end of each 12-month period, for the corresponding amount.
Goods sent on approval for sale or return. Generally, under the Portuguese VAT rules, a taxable supply of goods is deemed to have taken place when goods are sold, and they are not returned to the supplier within a year.
Reverse-charge services. The rules stated above also apply to reverse-charge services. However, the tax point rule is irrelevant for the supplier since no VAT is assessed by the supplier (who must still issue the invoice within five working days after the service is rendered).
The purchaser should self-assess the VAT when receiving the invoice. However, if there is a delay in the supplier issuing the invoice, the VAT should be reverse charged on the fifth day (after the taxable event), but the purchaser cannot recover the VAT until it has the original invoice. Therefore, in practice, the reverse charge is normally applied by the purchaser when the invoice is issued, even if more than five days have elapsed from the taxable event.
Leased assets. Since leasing agreements are also considered a continuous supply of services, the time of supply occurs at the end of the period foreseen for each payment.
Moreover, when the client exercises the purchase option, the VAT is due for the supply of goods for the difference value of the asset.
Imported goods. The time of supply for imported goods is either the date of importation or when the goods leave a duty suspension regime.
Intra-Community acquisitions. The time of supply for an intra-Community acquisition of goods is the 15th day of the month following the month in which the basic time of supply for the goods occurs. If the supplier issues an invoice before this date, the time of supply is when the invoice is issued.
Intra-Community supplies of goods. Although no VAT is chargeable for an intra-Community supply, an invoice must be issued by the 15th day of the month following the month in which the goods are delivered to the customer.
For continuous intra-Community supplies of goods over more than one calendar month, the tax point shall be regarded as being completed on expiry of each calendar month until such time as the supply comes to an end.
Distance sales. In respect of supplies of goods for which VAT is payable by the person facilitating the supply through the use of an electronic interface, such as a marketplace, platform, portal or similar means; distance sales of goods imported from third territories or third countries in consignments of an intrinsic value not exceeding EUR150; the chargeable event shall occur, and VAT shall become chargeable at the time when the payment has been accepted.
For distance sales of goods imported from third territories or third countries on which VAT is declared under the special regime for distance sales of goods imported from third territories or third countries, in consignments of an intrinsic value not exceeding EUR150, the chargeable event shall occur, and VAT shall become chargeable, at the time of supply. The goods shall be regarded as having been supplied at the time when the payment has been accepted.
F. Recovery of VAT by taxable persons
A taxable person may recover input tax incurred with the acquisition of goods and services for its business purposes. A taxable person generally recovers input tax by deducting it from output tax charged on the supplies carried out. The input tax can be deducted in the VAT return of the period or the subsequent period in which the invoices were received.
The time limit for a taxable person to reclaim input tax in Portugal is 4 years/48 months counted from the beginning of the civil year following the date when the VAT become taxable/deductible. This is the general statute of limitation period.
Input tax includes VAT charged on goods and services supplied in Portugal, VAT paid on imports of goods and VAT self-assessed on intra-Community acquisitions of goods and services, and reverse-charge services (see the EU chapter).
A valid tax invoice or customs document is requested by the tax authorities during their analysis of a claim for input tax.
Nondeductible input tax. Input tax may not be recovered on purchases of goods and services that are not used for business purposes (for example, goods acquired for private use by an entrepreneur). In addition, input tax may not be recovered for some items of business expenditure.
Examples of items for which input tax is nondeductible
• Purchase, hire, lease, maintenance and fuel for private cars and vans
• Business gifts (unless valued at less than EUR50)
• Restaurant meals
• Entertainment and luxury goods and services
• Transport expenses and business travel, including toll costs, incurred outside the scope of the organization or participation in congresses, fairs or exhibitions
• Accommodation and meals incurred outside the scope of the organization or participation in congresses, fairs or exhibitions
• Drinks and tobacco
• Credits over related parties
• Credits over entities declared insolvent or bankrupt before the realization of the transaction
• Credits over the State
Additionally, note that for credits overdue for more than 12 months, the VAT adjustment requires a prior report certified by a chartered accountant and a prior electronic authorization request to the PTA. For credits overdue for more than six months, the VAT is automatically recovered through the VAT return.
Noneconomic activities. Input tax incurred on purchases that are used for noneconomic activities is not recoverable in Portugal.
G. Recovery of VAT by non-established businesses
The Portuguese VAT authorities may refund VAT incurred by businesses that are neither established nor registered for VAT in Portugal. Non-established businesses may claim Portuguese VAT to the same extent as VAT-registered businesses. If a taxable person incurs expenses within Portugal, it may opt to register for VAT in Portugal if it has output tax related to its operations. This option may be chosen due to the fact that a VAT refund claim may otherwise be very time consuming. See the Voluntary registration and small businesses subsection above.
EU businesses. For businesses established in the EU, refunds are made under the terms of the EU Directive 2008/9/CE.
The VAT refund procedure under the EU Directive 2008/9/CE, together with the provisions of Decree-Law no. 186/2009 of 12 August, may be used only if the business did not perform any taxable supplies in Portugal during the refund period (excluding supplies covered by the reverse charge and exempt transport services). For full details, see the EU chapter.
Find below specific rules for Portugal:
• The refund request is made electronically in the country where the entity is established and must be sent together with the relevant information (such as the entity’s identification, refund period) and with the required documents that sustain the refund claim, i.e., invoice or import documents and related information that allow for proving the relevant VAT was paid.
• The request must be filed in Portuguese or English and should be submitted by 30 September of the following year when the tax became due. The minimum amount to be refunded is EUR50.
• The deadline for the approval or denial of the refund is four months, but it may be extended to six or eight months if the PTA issue one or two requests for additional information or documents.
• Claimants may request payment of interest if a claim is repaid more than 10 working days after the favorable decision notification.
Non-EU businesses. For businesses established outside the EU, refunds are made under the EU 13th Directive, together with the provisions of Decree-Law no. 186/2009 of 12 August. All refunds must be made taking into account the 13th Directive. There is no specific guidance as for UK companies. For full details, see the EU chapter.
Portugal applies the principle of reciprocity; that is, the country where the claimant is established must also provide VAT refunds to Portuguese businesses.
Find below specific rules for Portugal:
• The procedure is the same as regarding businesses established in the EU with the following particularities regarding non-EU businesses:
– A tax representative domiciled in Portugal needs to be appointed and granted with powers to comply with all obligations arising from the refund request. The request is made directly by the representative to the VAT Refund Services, in paper or online.
Filing a certificate, issued by the State where it is established, proving to be subject to a general sales tax, as well as the confirmation from that State on the reciprocity of treatment for taxable persons established in Portugal. This certificate may not be submitted if there is a reciprocity agreement in place between the two countries.
• The VAT refund request must be sent to the following address:
VAT Refund Services
Avenida João XXI
nº 76, 5º 1049-065 Lisboa
Late payment interest. The PTA should pay the refund request until the end of the second month after the submission of the refund. In case of taxable persons that are registered in the monthly reimbursement regime, the PTA must pay until the 30 days after the submission of the refund claim. After that, the taxable person can request the payment of compensatory interest (4% per year).
H. Invoicing
VAT invoices. A Portuguese taxable person must generally provide a VAT invoice for all taxable supplies made, including exports and intra-Community supplies. A VAT invoice (or equivalent document) is necessary to support a claim for input tax deduction or a refund under the EU Directive 2008/8/CE or EU 13th Directive refund regimes (see the EU chapter).
Generally, goods in transit within the Portuguese territory must be accompanied by a special delivery note or invoice. Delivery notes must be electronically communicated to the PTA before the beginning of the transport. These transport documents must contain the same information as an invoice, excluding the value of the transaction. These documents must also contain details indicating from where the goods were dispatched, the destination of the goods and the time of commencement of the dispatch.
Portuguese taxable entities with head office, fixed establishment, domicile or even mere VAT registrations (independently of having appointed or not a tax representative herein), in Portuguese territory must communicate electronically to the PTA the relevant data of the invoices issued during a particular month, at the latest on the 5th day of the subsequent month.
Issuing invoices through a certified invoicing program is mandatory for taxable persons who:
• Have a head office, fixed establishment, domicile or even mere VAT registrations in Portugal, or other, are obliged to raise invoices
• Have had, in the previous calendar year, a turnover exceeding EUR50,000 (or in the year in which the activity begins, the annualized turnover exceeds EUR50,000)
• Use invoicing software
• Are required to have organized accounting or have chosen to do so
Since 1 July 2021, even taxable persons who are not established in the national territory but herein registered for VAT are obliged to use an invoicing system certified by the PTA.
This obligation to use certified invoicing systems should be applicable to nonresident entities (even with mere VAT registrations), provided that the company:
• Had a turnover threshold higher than EUR50,000 in the previous calendar year, or when, in the financial year in which the activity begins, the period in question is less than the calendar year, and the annualized turnover relating to that period exceeds that amount Or
• Use any billing software to issue their invoices Or
• Are required to have organized accounting or have chosen to do so
the adoption of such procedure. Also, issuing electronic invoices is only acceptable if the authenticity of origin, integrity of the content and the legibility of the invoice is ensured by business controls that create a reliable audit trail between the invoice and the supply of goods or services.
In practical terms, every electronic invoice should have a digital signature, to ensure the authenticity of its origin, the integrity of its content and its legibility. The qualified electronic signature or qualified electronic stamp and EDI are examples of technologies that fulfill this requirement.
If the draft state budget law for 2025 is approved, in principle, only from 1 January 2026 onward, electronic invoices must necessarily contain a qualified electronic signature or a qualified electronic seal or be issued via EDI.
Unstructured invoices raised in HTML, PDF or Word format, as well as invoices in image or paper format that are later scanned, and invoices sent by fax are not included in the concept of electronic invoicing (however, PDF invoices might continue to be accepted as electronic invoices for all tax purposes until 31 December 2025, if the draft state budget law for 2025 is approved).
The bidimensional bar code (a QR code, that became mandatory since 1 January 2022) and the unique invoice code (UUID/ATCUD under the Portuguese short abbreviation, which is mandatory since 1 January 2023 onward, are to be implemented by taxable persons and users of billing software programs certified by the PTA or other electronic means.
Unique invoice code. The unique invoice code (UUID) is to be implemented by taxable persons and users of billing software programs certified by the PTA or other electronic means.
The unique invoice code was already briefly mentioned in article 35 of Decree-Law no. 28/2019 of 15 February. It is now clear that such code should result from the combination of the following two elements – separated by the character “-” (without quotation marks):
• Series validation code
• The sequential numbering of the document within its series
Regarding the series’ validation code, this is to be assigned by the PTA upon the taxable person’s electronic communication to the PTA, prior to their use, the identification of the series used for issuing invoices and other tax relevant documents, series per each establishment and per each mean of processing used (as provided for in paragraph 2 of article 35 of Decree-Law no. 28/2019 of 15 February). To obtain the code of the series validation, the following elements needs to be communicated:
• The document series’ identifier
• The type of document, according to the document types defined government ordinance setting SAF-T – corresponding to the fields “Type of document” and “Type of receipt”
• The beginning of the sequential numbering to be used in the series
• The expected starting date for the use of the series for which the validation code is requested
Regarding the sequential number to be used, it is the sequence of numeric characters – for example, for billing software it is the sequence immediately after the slash (/), as defined in the SAFT’s data structure.
In this regard, it should be stressed that the UUID (in Portuguese, ATCUD) needs to be stated in all invoices and other tax relevant documents raised by way of electronic billing programs, other electronic means such as cash registers or in pre-printed documents – and specifically mention “ATCUD: Codigode Validação–Numerosequencial” (“UUID: Series validation code-sequential number”).
Regarding documents with more than one page, UUIC must appear on all of them and, when applicable, immediately above the QR code.
QR code. The QR code is mandatory since 1 January 2022. The bidimensional bar code (a QR code) is to be implemented by taxable persons and users of billing software programs certified by the PTA or other electronic means.
Producers of software must guarantee the correct generation of the QR code, which must be included in the invoices and other relevant tax documents issued by invoicing certified programs.
Also, producers and users of certified billing software systems must guarantee the perfect readability of the QR code, within the body of the document, regardless of the means by which it is presented to the customer (paper or electronic). Regarding documents with more than one page, the QR code can appear on the first or on last page.
Relief from printing or sending e-invoices in transactions with nontaxable persons. Taxable persons are relieved from printing paper invoices and/or from sending electronic invoices to customers/recipients when the same are nontaxable persons, provided that the following conditions are cumulatively fulfilled:
• The tax identification number of the purchaser is included in the invoices.
• Invoices are processed and communicated to the PTA through a certified computer program.
• The taxable person has opted for the transmission of invoices in real time to the PTA.
This relief is not available when the acquirer explicitly requests the paper or electronic invoice.
For the EU VAT in the Digital Age (ViDA) proposals, refer to the EU chapter.
Simplified VAT invoices. Under the Portuguese VAT code, simplified invoicing may be used for the sale of goods and/or services up to an amount of EUR1,000 for supplies made to nontaxable persons by retailers or street sellers. For other supplies of goods and/or services, a simplified invoice may be issued if the amount of the transaction does not exceed EUR100 (for instance, the identification number of the nontaxable person is only mandatory if its insertion is required by the nontaxable person).
Self-billing. Self-billing is allowed in Portugal. It means that the acquirer raises an invoice on behalf of the supplier of goods or services. For this procedure to be applicable, the following requirements must be met:
• Prior agreement, in the written form, is made between the acquirer and the supplier of the goods or services
• The acquirer must have evidence that the supplier of the goods or the service provider has taken notice of the issuance of the invoice and accepted its content
• The invoice must refer to self-billing (“autofaturação”)
Proof of exports and intra-Community supplies. VAT is not chargeable on supplies of exported goods or on the intra-Community supply of goods (see the EU chapter). However, to qualify as VAT-free, exports and intra-Community supplies must be supported by evidence that confirms the goods have left Portugal. Acceptable proof includes the following documentation:
• For an export, stamped customs documentation and an indication on the invoice of the Portuguese VAT law article that permits exemption with credit for the supply
• For an intra-Community supply, as of 1 January 2020, in accordance with article 45a of the Council Implementing Regulation no. 2018/1912 of 4 December 2018, the necessary transport proofs to apply the exemption to the intra-Community transactions have been legally defined and harmonized for all Member States, namely, through the provision of a presumption that the essential condition to apply the exemption – the goods have been dispatched or transported from a Member State to a destination outside its territory but within the EU – is fulfilled when the economic operators are in possession of specific documentation (which varies depending on the entity that takes care of the transport)
– When it is the supplier (or third party on its behalf) who carries out the transport: the supplier needs to have in its possession two noncontradictory elements, issued by independent
Quarterly VAT returns must be filed if the taxable person’s turnover in the preceding year did not exceed EUR650,000.
Monthly VAT returns must be submitted before the 20th day of the second month after the end of the return period. Quarterly VAT returns must be submitted before the 20th day of the second month after the end of the return period.
Periodic payments. The general deadline for paying the VAT due by a taxable person to the Portuguese State is as follows:
• By the 25th day of the second month following the date of the operations for taxable persons in the monthly VAT filling regime
• By the 25th day of the second month following the quarter of the operations for taxable persons in the quarterly VAT filling regime
If a taxable person is neither resident nor established in Portugal, it has three options to pay VAT: direct debit, MBWay or bank transfer.
Regarding the VAT payments made by bank transfer to the PTA, after the submission of the VAT return for a taxable period (monthly/quarterly), the taxable person must obtain (besides the document that proves the submission) the respective payment document that includes the specific payment reference required to be stated upon making the transfer to the PTA’s bank account (so the authorities are able to recognize the payment performed in due time as corresponding to the appropriate taxable period). The transferred amount should account for the VAT amount due, net of any banking costs and arrive at the PTA’s bank account at the 25th day of the following month/ quarter, respectively.
Electronic filing. Electronic filing is mandatory in Portugal for all taxable persons. For this purpose, the taxable person should register at the PTA’s website to receive an access code. Intrastat returns, EC Sales List statements and annual VAT returns must be submitted by electronic means as well.
Payments on account. Payments on account are not required in Portugal.
Special schemes. Cash accounting. In accordance with this regime, taxable persons will only pay the VAT due once they receive payment of an invoice from a customer. This regime is optional and will apply to companies with a turnover of up to EUR500,000.
VAT exemption. This special regime applies to entities that are not required to have organized accounting records; that do not import or export goods or related activities; and whose turnover does not exceed EUR10,000 (retailers EUR12,500). These taxable persons do not charge VAT on their supplies and input tax cannot be deducted.
Import VAT postponed accounting. The reverse-charge procedure for import VAT (also known as postponed accounting) has been introduced in Portugal. To benefit from this new mechanism, a taxable business must fulfill the following requirements:
• It must fall under a monthly VAT regime.
• Its tax situation must be accurate, e.g., with no debts due to tax authorities.
• No input tax blocked restrictions apply.
Small retailers. This regime applies to entities that are required to have organized accounting records; do not import or export goods or related activities; exercise a retail trade activity; have a volume of purchases not exceeding EUR50,000; have a goods purchase volume not less than 90% of the total volume of purchases; do not carry out intra-Community transactions of goods; and have a volume of services, not exempt from VAT, not exceeding EUR250.
The VAT paid by these taxable persons amounts to the 25% of the tax paid on the purchase of goods and raw materials without processing. Moreover, they can only deduct the VAT paid on the purchase or lease of capital goods and other goods for the company’s own use.
Secondhand goods, works of art, collectors’ items or antiques. For supplies of secondhand goods, works of art, collectors’ items or antiques, the taxable amount will be the difference between the sale price and the purchase price in accordance with the provisions of special legislation and supported by the documentation underlying the supply.
Annual returns. An annual return is required to be filed in Portugal if taxable operations were performed during such year. The annual return is a summary of all the periodic VAT returns for statistical purposes as well as corporate income tax and personal income tax.
The annual return is a global return for all taxes (corporate tax, VAT, etc.). The annual return has a number of appendices attached including VAT – tax and accounting requirements that detail the VAT and net amounts in relation to supplies, carried out and received, and suppliers and customers lists, which provide information on all local supplies and purchases made by a company in Portugal. These listings are used for cross-checking data of purchases and sales with the periodic VAT returns.
Foreign companies that do not have a fixed establishment in Portugal are only registered therein for VAT purposes and did not carry out any operation in a particular fiscal year (i.e., no periodic returns were submitted) are not required to submit an annual VAT return.
In general, annual returns must be submitted by 15th July following the end of the calendar year.
Supplementary filings. In the context of the reporting obligations relating to VAT, in addition to VAT returns there are three more types of obligations, namely, the Intrastat, the EU Sales Returns and, the Simplified Business Information (that covers all taxes supported in Portugal).
There are also reporting obligations on invoice details and SAF-T files. See the subsection Digital tax administration below for more detail.
Intrastat. A Portuguese taxable person that trades with other EU countries must complete statistical reports, known as Intrastat statements, if the value of its sales or purchases of goods exceeds certain thresholds. Separate reports are required for intra-Community acquisitions (Intrastat Arrivals) and for intra-Community supplies (Intrastat Dispatches).
The threshold for Intrastat Arrivals in 2025 is EUR600,000. The threshold for Intrastat Dispatches in 2025 is EUR600,000. These limits apply to the mainland and the Azores. In Madeira, the threshold for Intrastat Arrivals and Dispatches in 2025 is EUR25,000. If a taxable person reaches the respective assimilation thresholds during 2025, the Intrastat authorities (INE – Instituto Nacional de Estatística) request Intrastat returns covering all movements during the year 2025.
The Intrastat return statement is submitted on a monthly basis. The submission deadline is the 15th business day following the end of the return period. For a period in which the taxable person does not carry out any intra-Community acquisitions (Intrastat Arrivals) or intra-Community supplies (Intrastat Dispatches), a nil return must be completed (after exceeding the thresholds). Intrastat returns must be filed in EUR.
EU Sales Returns. If a Portuguese taxable person carried out intra-Community supplies of goods and/or services, it must submit an EU Sales Return (ESR).
If a Portuguese taxable person carried out any consignment sales of goods, under the new Simplification rules for call-off stock arrangements for Intra-Community transactions (article 7-A of the RITI, added by Law no. 49/2020) it must submit an ESR in accordance with the terms of the Government Ordinance no. 215/2020 of 10 September.
Statute of limitations. The statute of limitations in Portugal is four years. This is from the beginning of the civil year following the date when the VAT became taxable/deductible or became due. Thus, the PTA might go back to review the VAT returns previously submitted and identify errors, as well as to apply any additional VAT assessments, penalties and interest until that time is elapsed.
On the other hand, said statute of limitation is also applicable to the taxable persons, who have also four years to voluntarily correct any errors. This period is shortened to two years in case the corrections are related to clerical or arithmetical errors.