Portugal: New Law on Cross-border Payments as Anti-Fraud Measures

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In a significant effort to tackle VAT fraud within the realm of cross-border e-commerce, Portugal has enacted Law No. 81/2023, which has been recently published in the Official Gazette. Aligned with EU Directive 2020/284, this legislation imposes rigorous requirements on payment service providers. The key provisions of the law include:

  1. Definitions: Law No. 81/2023 establishes precise definitions for critical terms in the fight against fraud, such as “beneficiary,” “cross border payment,” and “payment service provider.”
  2. Threshold Requirements: The record-keeping obligations are applicable to providers handling more than 25 cross-border payments to the same payee within a quarter.
  3.       Electronic Record-Keeping: Payment service providers operating in Portugal are now obligated to maintain electronic records for three years, documenting cross-border payments and beneficiaries on a quarterly basis.
  4.       Calculation Rules: The law introduces rules for calculating payment thresholds and determining the locations of payers and payment recipients, thereby enhancing transparency in cross-border transactions.
  5.       Exclusions for Certain Services: Specific payment services are explicitly excluded from the obligations outlined in the law, providing clarity on the scope of applicability.
  6.       Penalties for Non-compliance: Law No. 81/2023 outlines penalties for noncompliance with the new regulations, ensuring accountability for adherence to the prescribed measures.
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