Refund or deduction of input VAT is possible only where such input VAT is deductible according to the Portugal VAT Act.
Deduction of input VAT is not allowed for expenses connected to business travels made by taxable person and staff, including toll fees as well as fun and luxury, not considered normal operating expenses.
VAT is not recoverable for expenses in connection with :
- Acquisition/hiring/use/transformation/repair/manufacturing or import of passenger cars, pleasure crafts, helicopters, planes, motorcycles, except for goods which sale or exploitation is the object of
- Partial (50%) – Diesel, LPG, natural gas and biofuels, except for: Heavy passenger vehicles;
- Vehicles licensed for public transport, rent-a-car vehicles excluded;
Diesel; LPG, natural gas or biofuel consuming machines, which are not registered vehicles;
Tractors exclusively or predominantly used for fieldwork related to agricultural activity;
Vehicles transporting goods, weighting more than 3 500Kg
VAT is not recoverable for expenses in connection with food, accommodation, beverages and tobacco, except in cases the expense is related to conferences, fairs, expositions or congresses, where a deduction of 50% or 25% can be applied, according to the Portuguese VAT Code.