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INTERNATIONAL VAT GUIDE

Last Updated: December 6, 2024

VAT Guide for Businesses with Customers in Portugal

This guide provides an overview of VAT (Value Added Tax) in Portugal, including applicable rates, registration requirements, invoicing rules, compliance obligations, and filing deadlines. It is tailored for businesses engaging in transactions within Portugal or with Portuguese customers.

Overview

Portugal’s VAT system, governed by the Portuguese VAT Code, aligns with the EU VAT Directive. VAT applies to most goods and services supplied within Portugal, as well as on imports.

Currency

Euro (€)

VAT Number Format

PT followed by 9 digits (e.g., PT123456789)

Fiscal Representation

Yes, required for non-EU businesses conducting VAT-related activities.

Voluntary Registration

Yes, available for businesses below the threshold.

VAT Rates in Portugal

Rate Rate Type Description
23% Standard Rate Applies to most goods and services
13% Reduced Rate Applies to foodstuffs, restaurant services, and certain supplies
6% Reduced Rate Applies to essential goods, books, and medical supplies
0% Zero rate Intra-community and export transactions

VAT Registration in Portugal

Business Type VAT Registration Threshold
Resident Businesses EUR 12,500 per annum
Non-Resident Businesses No threshold; registration required for any taxable activity in Portugal

VAT Filing and Payment Deadlines

Frequency Filing Deadline Payment Deadline
Monthly 10th day of the second month following the period 10th day of the second month following the period
Quarterly 15th day of the second month following the quarter 15th day of the second month following the quarter

Digital Services VAT Information

VAT on Cross-Border Electronically Supplied Services Yes
VAT Rate on Digital Services 23%
Threshold for Registration EUR 10,000 per calendar year for EU-based businesses; no threshold for non-EU businesses
VAT on B2B Sales Reverse charge mechanism applies

Note:

Portugal applies VAT on digital services based on the consumer’s location, generally utilizing the OSS system for EU cross-border services.

Digital Services in Scope

  • Website supply, web-hosting, and maintenance
  • Supply of software and updates
  • Streaming or downloading of music, films, games, including gambling

Exemption

Access to electronic newspapers and periodicals may be exempt under specific conditions, typically for educational or public interest purposes.

E-invoicing Requirements

Portugal mandates e-invoicing for B2G transactions. Currently, e-invoicing is not mandatory for B2B and B2C transactions in Portugal. However, businesses must use certified invoicing software if their annual turnover exceeds €50,000.

Digital Reporting Requirements

Portugal requires digital reporting of VAT-related transactions. Businesses must submit VAT data electronically to the Portuguese tax authorities via the SAF-T system.

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Disclaimer: This guide is for informational purposes only and may not cover all aspects of Portuguese VAT. Consult one of our tax professionals for specific guidance regarding your business.

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