Standard VAT Rate
19%
Digital Reporting Requirements / E-invoicing
Yes
Sales Tax on Cross-Border Electronically Supplied Services
Yes
Tax Authority Website
National Agency of Fiscal Administration (Agenția Națională de Administrare Fiscală)
There are three separate regions that fall within the Portugese VAT (”Imposto sobre Valor Acrescentado” (IVA)) regime - mainland Portugal, the Madeira archipelago, and the Azores. Rates levied in these regions are different.
The following are exempt from VAT within Portugal and the autonomous regions:
Individuals: The Taxpayer Individual Number (”Número de Identificação Fiscal” (NIF)) is composed of nine digits.
Businesses: The NIF for businesses is referred to as the NIPC (”Número de Identificação de Pessoa Colectiva”). This number is also comprised of nine digits.
Digital Services in the European Union (EU) are often referred to as electronically supplied services (ESS). Portugal applies the harmonized EU VAT rules for ESS.
Under the EU’s B2C ESS rules, until the sales value reaches EUR 10,000 (including distance sales of goods), the seller can charge VAT where it is resident. Once the sales exceed the threshold, the seller should register for VAT in Portugal, or it can choose to account for the VAT under the EU’s One Stop Shop (OSS) regime.
VAT Rate: Standard rate of 23% is typically applied in mainland Portugal, 22% Madeira, and 16% in the Azores should typically be applied to the sale of affected electronically supplied services
Will your business need to pay VAT on digital services in Portugal in 2024?
Learn More About VAT on Digital Services in Portugal
Portugal applies the harmonized European Union’s (EU) VAT rules for marketplace & platform operators.
Supply of goods
A marketplace is deemed to have received and supplied the goods themselves. This transaction is split into two supplies:
This rule covers the following:
Supply of services
When electronically supplied services are sold through an intermediary, e.g. a marketplace for applications, the intermediary is deemed to have received and supplied the services themselves. Therefore, the VAT liability shifts to the intermediary from the underlying supplier.
Invoices should be dated, numbered sequentially, and contain the following information, at a minimum:
Invoices may, subject to acceptance by the recipient, be issued electronically.
In terms of digital reporting, the obligation to submit invoice data electronically began in 2013.
Taxable persons (both resident and non-resident) with an annual turnover above EUR 50.000 should use invoicing software certified by the Tax Authority to transmit invoicing data to the Tax Authority portal and generate supporting documents.
Digital Reporting obligations for taxable persons in Portugal consist of:
It is mandatory to generate electronic invoices for B2G transactions in Portugal, however this obligation does not exist for B2B and B2C transactions. Electronic invoicing in public procurement was initially intended to enter into force on January 1, 2019. The timeline has been updated several times due to the complexity of the project, and then the COVID-19 pandemic.
After the implementation of B2G e-invoicing for large taxpayers, the last phase covering small&medium-sized companies and micro-enterprises will go live on January 1, 2025.
After these changes, all entities should generate e-invoices in the approved standard format – CIUS-PT when supplying services to public entities.
Following the recent latest legal changes, PDF invoices will be considered as electronic invoices for all tax related purposes until December 31, 2024.
Learn more about E-Invoicing and Digital Reporting in Portugal
The governmental body responsible for the digital reporting of invoice data is the Portuguese Tax and Customs Authority.
Most governmental entities receive e-invoices through the FE-AP (Electronic Invoice Portal).
Companies and self-employed workers should submit a periodic declaration to pay Value Added Tax (IVA) due in Portugal.
The periodic declaration should be submitted:
In the case of the late filing of VAT returns and payments, the Portuguese Tax Authority should enforce the following penalties:
Fines for non-delivery of VAT are calculated based on the amount owed, but have a minimum value of EUR 25. They are provided in the RGIT (General Regime of Tax Infringements).
Fine for the delay due to negligence:
Fine for the culpable delay, up to 90 days:
Fonoa does not provide professional tax opinions or tax management advice specific to the facts and circumstances of your business and that your use of the Specification, Site, and In addition, due to rapidly changing tax rates and regulations that require interpretation by your qualified tax professionals, you bear full responsibility to determine the applicability of the output generated by the Specification and Services and to confirm its accuracy. No professional tax opinion and advice. Fonoa does not provide professional tax opinions or tax management advice specific to the facts and circumstances of your business and that your use of the Specification, Site, and In addition, due to rapidly changing tax rates and regulations that require interpretation by your qualified tax professionals, you bear full responsibility to determine the applicability of the output generated by the Specification and Services and to confirm its accuracy.