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Portugal

 

News & Tips

Deferred payment upon importation 

Introduction of a new deferred payment upon importation should take place in September 2017.


Cash Accounting Scheme [Tip]

A new Cash Accounting Scheme has been introduced in the Portuguese VAT Act with effect from October 1st, 2013. Under this scheme, taxpayers report the VAT charged on sales of goods or services on the date when the payment is received and the right to deduct input VAT arises when payment is made. The scheme is optional and subject to certain requirements [annual turnover exceeding € 500.000 and "B2B" transactions]. This important VAT change aimed at helping SMEs to improve their cash flow.


Reduced VAT rate for restaurant services

As from 01/07/2016, VAT rate on restaurant services will be reduced from the ordinary VAT rate of 23% to the intermediary rate of 13%.


DOING BUSINESS IN PORTUGAL [PT] - VAT GUIDE

 

General

VAT Directive

Portugal

What is the structure of the VAT number?

Each individual VAT identification number shall have a prefix in accordance with ISO code 3166 - alpha 2 - by which the Member State may be identified.

 

Portuguese VAT numbers have 11 characters [PT + 9 digits]. The last number constitutes a control number.

What is the local name of the tax?

  Imposto Sobre o Valor Acrescentado [IVA]

VAT rate

VAT Directive

Portugal

VAT rates

Member States must apply a standard VAT rate [not lower than 15%] which must be the same for the supply of goods and for the supply of services.

Member States may apply either one or two reduced rates [not lower than 5%] only to supplies of goods or services as listed in the Annex III of the VAT Directive.

 

Portugal applies a standard VAT rate of 23% and two reduced VAT rates: 6% and 13%.

 

See VAT rates applied in the EU

VAT return

VAT Directive

Portugal

How is the tax period determined?

The tax period shall be set by each Member State at one month, two months or three months.

Member States may, however, set different tax periods provided those ones do not exceed one year.

Monthly/Quarterly

Your company has to report its VAT position by filing periodical VAT returns on a quarterly basis if your annual turnover of preceding year does not exceed €  650.000 and on a monthly basis otherwise. Monthly reporting period can be opted for.

 

When should periodical VAT return be filed?

The VAT return shall be submitted by a deadline to be determined by Member States.

That deadline may not be more than two months after the end of each tax period.

 

Monthly VAT return must be submitted by electronic means to Portuguese VAT authorities before the 10th day of the second month [10 of N+2] after the month during which the relevant tax period ends.

Quarterly VAT return must be submitted by the 15th day of the second month [15 of N+2] following the quarter to which transactions relate.

 

Statement

VAT Directive

Portugal

Annual recapitulative statement

Is this requirement laid down in the country and what is the filing deadline?

Member State may require taxable persons to submit a return in respect to all transactions carried out in the preceding year.

That return shall provide all the information necessary for any adjustments.

 

Your company is required to submit a yearly return along with listings of suppliers and/or customers if thresholds are reached. Annual return should be filed before July 15th of the next year.

Recapitulative statement of intra-EU supply of goods [European Sales Listing - ESL]

Are quarterly filings allowed by the country and what is the filing deadline?

The recapitulative statement shall be drawn up for each calendar month.

However, Member States, in accordance with the conditions and limits which they may lay down, may allow taxable persons to submit the recapitulative statement on each calendar quarter where the total quarterly amount of intra-EU supplies of goods does not exceed either in respect of the quarter concerned or of any of the previous four quarters the sum of € 50.000 or its equivalent in national currency.

The recapitulative statement shall be submitted within a period not exceeding one month.

 

The recapitulative statement [ESL] must be drawn up for each calendar month. Taxpayers filing quarterly VAT returns must however file the Statement on a quarterly basis, unless the amount of intra-EU delivery of goods during the current quarter or any of the four preceding quarters exceeds € 50.000, in which case it must be submitted monthly.When the threshold is exceeded, the requirement to submit a monthly recapitulative statement becomes irreversible. ESL must be filed by electronic means  no later than the 20th day of the month after the end of the reporting period [month/quarter] to which it relates.

Payment

VAT Directive

Portugal

What is the payment deadline?

Any taxable person liable for the payment of the VAT must pay the net amount of the VAT when submitting the VAT return.

Member States may, however, set a different date for payment of that amount.

 

 

The amount of VAT due has the same deadline as the VAT return.

Are interim payments required?

Member States may require interim payment to be made.

Interim payments are not required.

VAT refund

VAT Directive

Portugal

VAT refund for companies VAT registered in the country.

Is any VAT credit automatically carried forward or refunded?

Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period. However, Member States may refuse to refund or carry forward if the amount of excess is insignificant.

 

A VAT credit is in principle automatically carried forward to the next period, unless a tax refund has been applied for.

Special measures for foreign companies

VAT Directive

Portugal

Optional reverse charge [art. 194 of the VAT Directive] for non-resident supplier.

SUPPLY OF GOODS

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

Reverse charge on all supplies of goods provided the recipient is a taxable person.

Optional reverse charge [art. 194 of the VAT Directive] for non-resident provider.

SUPPLY OF SERVICES

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

Reverse charge on all supplies of services provided the recipient is a taxable person, or a non taxable person VAT registered for intra-EU transactions .

Have simplification measures been taken to avoid registration of the foreign company for the goods held on consignment in the country?

  No simplification measures are available for consignment stock.

Do special arrangements apply to "call-off-stock"?

  No simplification measures are available for call-off-stock.
Triangulation can be applied when the middleman (B) is VAT registered [as a non-established company] for others supplies in the 3rd country [Member State of destination]?    

VAT on import

VAT Directive

Portugal

VAT warehousing regime

Member States may exempt the importation of goods and the supply of goods which are intended to be placed under warehousing arrangements other than customs warehousing.

 

Portugal has introduced a VAT warehousing regime applicable under specific conditions.

VAT on importation – Postponed accounting via the VAT return.

Is it possible for a company to pay the import VAT via the periodical VAT return?

Member States may provide that VAT on importation does not need to be paid at the time of importation on condition that it is entered as such in the VAT return to be submitted.

 

Postponed accounting via the VAT return is not possible in Portugal. Import VAT needs to be paid to the customs authorities upon importation [immediate payment]. A deferred payment for VAT purposes only is however possible under specific conditions.

 

Miscellaneous

VAT Directive

Portugal
Intrastat Threshold  

Dispatches: € 250,000

Arrivals : € 350,000 

Distance Sales - Threshold   € 35,000  See various thresolds applied in the EU
Ministry of Finance   website

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