VAT Guide in Portugal-Global VAT Compliance
VAT Guide in Portugal-Global VAT Compliance
VAT Guide in Portugal-Global VAT Compliance
PORTUGAL
Contents
Contents ...............................................................................................................................................................................1
Registration ...................................................................................................................................................................... 11
Invoice Requirements..............................................................................................................................................15
Intrastat ........................................................................................................................................................................... 24
EC Sales List................................................................................................................................................................... 26
Ecommerce.................................................................................................................................................................... 27
Disclaimer
The information provided by Global VAT Compliance B.V. on this pdf is intended for general informational
purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these
pages and cannot be held liable for claims or losses deriving from the use of this information. If you wish to
receive VAT related information, please contact our experts at support@gvc.tax
Portugal's VAT regulations align with the European Union (EU) legislation,
reflecting its status as a founding EU member. As such, Portugal must adhere to
the EU VAT Directives, which offer VAT guidelines. In instances of discrepancies,
the European Directive prevails. For VAT matters, Portugal's territory
encompasses the autonomous regions of Azores and Madeira, where lower tax
rates are applicable for transactions on these islands.
Scope of Taxation
In Portugal, there are taxes applicable on the provision of goods and services in
exchange for payment, as well as on certain intra-Community transactions and
on imported goods brought into the country.
Currency € Euro
VAT number format PT+9 digits
PT123456789
VAT rates Mainland Portugal - Standard 23%;
Intermediate 13%; and Reduced 6%
Madeira - Standard 22%; Intermediate 12%; and
Reduced 5%
Azores - Standard 16%; Intermediate 9%; and
Reduced 4%
Zero-rated (0%) and exempt
Thresholds
Registration
Established EUR 12,500
Non-established None
Intra-EU Distance sales EUR 10,000
and electronically
supplied services to
consumers (OSS)
VAT Group Not available – must register for VAT
individually
Voluntary Registration Not available
Intra-EU Dispatches EUR 250,000
Intra-EU Arrivals EUR 350,000
However, there are different standard VAT rates in Madeira and Azores. In
Madeira, the standard rate of VAT is 22%, while in Azores, the standard rate was
18% before July 1, 2021, and was later reduced to 16% on or after this date.
Common wines
OSS Registration
This scheme allows for a single registration in one EU Member State to cover all
qualifying supplies into the EU. It is important to note that the OSS registration
scheme has replaced the Mini One Stop Shop registration that was in effect from
1 January 2015 until 30 June 2021 inclusive.
Taxable Persons
Under the Portuguese VAT regime, all taxable persons are required to register,
regardless of their turnover or any potential exemption.
However, there is VAT exemption scheme available for small taxpayers who meet
specific criteria, including having a turnover below the exemption scheme
threshold. This scheme is designed to alleviate the administrative burden on
small businesses and allows for certain tax benefits.
Voluntary Registration
Public Authorities such as state, regional, and local government bodies are not
considered taxable persons in relation to their activities or transactions as public
authorities. Therefore, if these entities do not engage in any other activities or
transactions, they are not required for VAT.
However, businesses with annual turnover that does not exceed the exemption
scheme threshold are required to Portuguese VAT. Although they are exempt
from the requirement to account for VAT, they are still obligated to comply with
other VAT-related obligations, such as keeping proper records and submitting
regular VAT returns.
Portuguese VAT law does not allow for VAT grouping. Therefore, even if legal
entities are closely connected, they must register for VAT individually. Separate
divisions of a single legal entity generally cannot be treated as distinct entities
for VAT purposes in Portugal.
VAT Representatives
However, if the taxable person is not established in Portugal but has a head
office, PE, or domicile in another EU Member State, they may opt not to appoint a
tax representative.
Distance Sales
Starting from 1 July 2021, the registration process for distance sellers within the EU
and for those outside the EU selling low-value goods may be simplified through
the implementation of the EU-wide “One Stop Shop” (OSS) regime. This system
allows sellers to register for VAT in one EU Member State and then declare and
pay VAT owed for sales made to customers in other EU Member States through
single VAT return. This simplifies the registration and reporting process, making it
more efficient for the sellers.
Under Article 29 of the Portuguese VAT Code, taxable persons are obliged to issue
an invoice for all supplies of goods and services, including exports and intra-
Community supplies, as well as any advance payments made to them. This
means that whenever there is change made to the taxable amount of a
transaction or the corresponding tax, an invoice must be issued.
Furthermore, when goods are transported within Portuguese territory, they must
be accompanied by a special delivery note or invoice that is electronically
communicated to the Portuguese tax authorities before the beginning of the
transport. This ensures that the tax authorities have the necessary information to
monitor and enforce VAT compliance for these transactions.
Article 36 of the Portuguese VAT Code lays out the requirements for the
information that must be included in an invoice. This includes the following
details:
Simplified Invoice
In Portugal, under Article 29 and 41 of VAT Code, taxable individuals are required
to submit periodic tax returns on a monthly or quarterly basis, depending on their
annual turnover. Taxable persons with an annual turnover of € 650,000 or more
in the preceding calendar year are required to file monthly tax returns. On the
other hand, taxable individuals with an annual turnover of less than € 650,000 in
the previous calendar year generally file quarterly tax returns, but they have the
option to file monthly returns if they choose to do so.
Returns must be submitted by taxable persons under Article 41 of VAT code. The
due date for filing return is the 20th day of the second month after the end of the
relevant monthly or quarterly period being reported on. There is an exemption for
the month of June and the second quarter, where returns must be submitted by
20th September.
✓ Ordinary exemptions.
✓ Exemptions with credit.
Electronic Filing
Taxable persons are typically allowed to deduct input VAT on expenses related to
their taxable activities including input VAT on intra-Community acquisitions and
imported goods. However, there are certain restrictions on the deduction of input
VAT.
Expenses related to the following, generally do not give the right to deduct input
VAT, even if incurred for a taxable activity:
Article 9 of the Portuguese VAT Code provides for exemptions on certain supplies,
subject to certain conditions and requirements.
These include:
Under the reverse charge mechanism, the recipient of the goods or services
must self-assess and pay the VAT due to the relevant tax authority, rather than
the supplier. This mechanism is generally applied in situations where it is difficult
for the supplier to determine the correct VAT rate or where there is a high risk of
VAT fraud.
Goods that fall under the reverse charge mechanism in domestic supplies
include items like portable computers, mobile phones, game consoles, and metal
scrap. Services under this category typically include construction services from
subcontractors and the sale of emission allowances, along with services
provided by the government.
Call-off stock
✓ The supplier, or a third party on their behalf, must send goods to another
Member State for a recipient who will later become the owner under a pre-
existing agreement.
✓ The supplier should not have an established business or a fixed
establishment in the Member State where the goods are delivered.
✓ The goods' recipient, who will later acquire ownership, must be VAT-
registered in the Member State where the goods are supplied.
✓ The supplier is required to maintain a 'call-off stock register' detailing the
transfer of goods to support the call-off stock simplification claim. This
transfer must also be recorded in the EC Sales List (ESL), identifying the
recipient and their VAT ID in the Member State of supply.
✓ The actual supply of goods to the intended recipient from the stored
location must happen within 12 months of the goods' arrival.
If these conditions are met, the call-off stock regime is mandatorily applied.
There are two distinct types of declarations based on the nature of the trade:
These involve monthly reporting on the arrival and dispatch of goods during the
specified reporting period.
Paper filing
Companies have the option to submit their tax returns to the Taxing Authorities
via mail. It is advisable for these companies to retain copies of all returns sent by
email for a duration of two years.
Electronically
Thresholds
Arrivals:
Per the regulations set by the Instituto Nacional de Estatistica, should a company
surpass the specified threshold at any point during the year, it is required to
submit Intrastat returns starting from the month of the initial transaction. For
instance, if a company only exceeds the threshold in April but had transactions
as early as January, it must file Intrastat returns starting from January.
From January 1, 2020, following an EU "Quick Fix," the ESL also needs to report
details on recipients involved in call-off stock arrangements. The filing frequency
of the ESL is electronic and monthly for those with monthly tax returns, and
quarterly for those with quarterly returns. However, for intra-Community goods
supplies exceeding 50,000 euros in the current or any of the past four quarters,
the statement must be filed monthly.
The ESL submission deadline is the 20th day of the month following the reporting
month or quarter.
Ecommerce
On July 1, 2021, the EU introduced its e-Commerce VAT Package, replacing the
existing distance selling regulations and expanding the Mini One Stop Shop
(MOSS). This marked a major shift in VAT rules for business-to-consumer (B2C)
transactions involving goods and services, affecting both EU imports and intra-
EU trade. The new package establishes a significantly lower pan-EU VAT
threshold of EUR 10,000 (EUR 0 for businesses outside the EU), expanding VAT
obligations for most businesses to a wider array of supplies.
From this date, all B2C sales of goods to EU consumers are subject to VAT in the
destination member state. VAT reporting is streamlined through the "One Stop
Shop" (OSS) systems, allowing sellers to report and pay VAT via a single member
state's tax portal. The Import OSS (IOSS) system facilitates suppliers and
electronic interfaces that sell imported goods into the EU in collecting, declaring,
✓ The submission of a single electronic return to the Member State where the
business is identified, though the VAT rates applied are those of the
consumer's country.
✓ Collaboration with the tax authorities of the Member State where the
business is established, even for cross-border sales.
Government Agencies
European Union
Disclaimer
The information provided by Global VAT Compliance B.V. on this pdf is intended for general informational
purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these
pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to
receive VAT related information please contact our experts at support@gvc.tax