VAT in Portugal - a complete guide

Are you shipping goods to customers in Portugal? Check if you need to register for Portuguese VAT and what the applicable VAT rates are in Portugal. Read on to find out more.

VAT in Portugal - table of contents:

Foreign companies importing or trading goods or services in Portugal may be required to register as non-resident traders in Portugal. They will then also be obliged to comply with local regulations, including invoicing rules and tax deadlines.

Should you register for VAT in Portugal?

Portugal requires non-residents to register if they engage in any of the following activities:

import of goods into Portugal from outside the European Union,
purchase and sale of goods within Portugal,
selling goods online to Portuguese consumers via the Internet, when turnover exceeds 10,000 euros,
warehousing goods in a consignment warehouse for sale to local customers.

IMPORTANT!

Starting from July 1, 2021, businesses engaging in online distance sales to consumers in Portugal, exceeding a turnover of 10,000 euros, have the option to register for VAT OSS. They can then file a consolidated VAT return covering all EU member states and pay foreign taxes using the ‘one-stop shop’ method, based on the rates of the buyer’s country. This exempts them from adhering to Portuguese tax regulations, except for applying the foreign VAT rate. If not registered for VAT OSS, you’re required to adhere to all of Portugal’s regulations, but solely regarding distance sales.

You can find the Portuguese tax office at the provided link.

Invoicing rules

For Portuguese B2B e-invoices, as of 2021, taxpayers must apply for a unique series of invoice numbers from the government before issuing invoices. They must then use certified software to add a QR code to each invoice with this unique document code.

Portuguese taxpayers must notify the tax authorities in advance of the planned invoice numbers for sales. To do this, they must submit:

the invoice number and series to be used,
the classification of this type of document, based on SAF-T,
the date of issuance of the first invoice in the series.

After the notification, you receive an 8-digit validation code for the series, which must be included on the invoice as a unique document code (ATCUD).

The traditional invoice should include the following elements:

date of issue,
supplier’s details and VAT identifier,
government contractor’s details,
contract and delivery schedule details,
payment information,
details of supplied goods or services,
net value,
VAT,
gross value.

Enterprises, being Portuguese residents, whose annual sales exceed 50,000 euros, must use government-approved invoicing software. This software should be capable of generating a unique invoice code (UUID). These codes should be reported to the tax authorities before issuing the invoice and should be included on the invoice.

From July 2021, non-resident companies should issue invoices using approved software packages. This will allow stamping invoices with a new QR code containing detailed information about the invoices for electronic scanning.

Invoices must be kept for 10 years by both the issuer and the recipient.

The deadlines for filing VAT returns in Portugal

In Portugal, VAT returns are submitted:

on a monthly basis – by the 10th day of the second month following the end of the taxable period, or
on a quarterly basis – by the 15th day of the second month following the end of the taxable period.

EU VAT returns are submitted by the 20th of the following month for the month in which the EU transaction took place. Additionally, the annual VAT return is due by 15 July of the following year.

The tax must be paid to the Portuguese tax office within 7 days after the end of the VAT reporting period (monthly or quarterly).

Portuguese SAF-T

Zasadniczo istnieje pięć wymogów sprawozdawczych SAF-T:

general ledger and entries
liabilities, including basic supplier data and invoices,
receivables, with basic customer data and invoices,
inventory and basic data,
fixed assets register with depreciation.

Taxpayers who are Portuguese residents are required to submit invoices monthly in SAF-T format.

The declarations must be submitted together with the regular VAT declaration by the 20th day of the following month.

Non-resident entrepreneurs registered for Portuguese VAT (e.g., due to exceeding the distance selling threshold) are exempt from SAF-T requirements.

Rates VAT in Portugal

PVAT in Portugal is due within 7 days after the end of the monthly or quarterly reporting period.

RATE	TYPE	TYPE OF GOODS OR SERVICES
23%	standard	all goods and services not covered by the reduced VAT rate,
13%	reduced	some food items, admission to some cultural events, meals in restaurants and cafes, some agricultural products, diesel fuel for agriculture, some goods and services for consumption in onboard transportation,
6%	reduced	some food products, some pharmaceutical products, medical equipment for the disabled, car seats for children, diapers for children, some books (including e-books), some newspapers and magazines, TV licence, social housing, repairs and renovations of private residential buildings, some agricultural products, accommodation in hotels, some social services, some medical and dental services, household waste collection, minor bicycle repairs, housekeeping services, fruit juices, firewood, cut flowers and cut plants for decorative purposes and food production, construction work related to new buildings, some legal services, some consumer goods in onboard transportation, sewage treatment, some works of art, collectibles, and antiques,
0%	zero	intra-Community and international air and sea transportation.

If you like our content, join our busy bees community on Facebook, Twitter, LinkedIn, Instagram, YouTube, Pinterest, TikTok.

Author: Lucy Adams
She has extensive knowledge in the field of accounting and constantly gains experience working for both small businesses and larger corporations. Her mission is to explain complex financial and accounting issues and teach business owners and those interested in the subject how to manage their finances effectively. She enjoys giving practical advice, discussing current accounting issues, and analyzing legislative changes that may affect business operations. She enjoys a straightforward approach to finance that helps entrepreneurs focus on growing their businesses. She translates complex issues into easy-to-understand language so that anyone can confidently make decisions that impact the success of their business.
View all posts