COUNTRY GUIDES / Portugal

Portugal tax guide for businesses

VAT Rate
23%
E-Invoicing
B2G Mandatory
Real-Time Reporting
Mandatory
Digital Service Tax
No
Products supported
Lookup
Tax ID validation
Tax
Tax amount calculation
Invoicing
Compliant invoice generator
Reporting
Real-time transaction reporting

Compliance And Rates

VAT Number Format In Portugal

All EU member states have a fixed format for their VAT numbers. In Portugal, it includes 9 digits and prefix PT, where the first digit for companies should be number 5 (e.g., PT501234567).

VAT Rates In Portugal

The standard VAT rate in Portugal is 23%, with reduced rates of 13% and 6% on certain goods and services. Some services are exempt from Portuguese VAT, such as intra-community supplies of goods and exportations.

  • 23% (Standard) – Applies to all taxable supplies, with certain exceptions
  • 13% (Reduced) – Some foodstuffs, restaurants food, some agricultural supplies, tickets for cultural events
  • 6% (Reduced) – Some foodstuffs, pharmaceutical and medical products, some books and newspapers, water supplies, certain agricultural supplies, legal services, construction supplies for new buildings
  • 0% (Zero) – Intra-community transactions and exportations

VAT Payments And Returns In Portugal

All businesses with Mexican VAT number must submit periodic VAT reports and payments.


VAT Payments Frequency In Portugal

  • Monthly – 15th of the second following month
  • Quarterly – 20th of the second following month

VAT Returns Frequency In Portugal

  • Monthly – 10th of the second following month
  • Quarterly – 15th of the second following month


Penalties in case of late filings or misdeclarations

In the case of the late filing of VAT returns and payments, the Portuguese government prescribed the penalties as follows:

  • Non-payment and late payment of VAT – In case of the late filing of VAT returns and payments, the Portuguese government prescribed the penalty from 30% to 100% of the tax due and an interest rate of 4.825% per year.
  • Non-submission and late submission of VAT returns – Penalties applicable in case of non-submission or late filing of VAT returns can vary from EUR 150 to EUR 3,750.
  • Incomplete and incorrect VAT returns – Penalties applicable in case of omissions or inaccuracies in relevant documents for tax purposes can vary from EUR 375 to EUR 45,000.
  • Non-compliance with invoicing and accounting obligations – Penalties applicable in case of non-issuance of invoices or its issuance after the legal deadline can vary from EUR 300 to EUR 7,500.

Invoice Requirements in Portugal

All electronic invoices in public procurement, which will be mandatory from April 2020, must contain at least the following:

  • date of issuance
  • supplier data (company name, address, VAT number)
  • government contractor data (name, address)
  • contract between parties
  • details about delivery
  • payment instructions
  • full description of goods and services (quantity, the price per unit)
  • the net, the taxable value of the invoice,
  • rate and amount of VAT applicable for the category of goods and services provided
  • the invoice total, the gross value of the invoice

E-Invoicing in Portugal

From 1st January 2019, the implementation of electronic invoicing in public contracts has become mandatory. That means that the issuing, sending, receiving, and archiving of invoices in public contracts, takes place only electronically, and the authenticity of the origin and the integrity of the invoice content must be guaranteed through the electronic signature of the issuer.

Portugal adopted the UBL 2.1 format (Univeral Business Language) for electronic invoicing. Most EU and Latin American countries use this format in the context of electronic invoicing.

Certified Billing Provider in Portugal

All VAT-registered businesses are required to issue their invoices through certified invoicing software.

This obligation is mandatory for local companies and from January 2021 for foreign companies as well.

Every transaction shall be reported within 5 days after the completed sale through the invoicing software certified by the Portuguese tax authorities (AT).

Fonoa has an invoicing software certified by the Portuguese authorities and can help you automate your invoicing process.

Date updated [May 12, 2021]