VAT GUIDE

PORTUGAL
Contents
Contents ...............................................................................................................................................................................1

Introduction to VAT in Portugal ............................................................................................................................1

Scope of Taxation ........................................................................................................................................................ 2

General Information .................................................................................................................................................. 3

VAT Rates ........................................................................................................................................................................... 5

Registration ...................................................................................................................................................................... 11

Invoice Requirements..............................................................................................................................................15

VAT Returns ..................................................................................................................................................................... 17

VAT Recovery .................................................................................................................................................................19

Reverse Charge Mechanism .............................................................................................................................. 21

Intrastat ........................................................................................................................................................................... 24

EC Sales List................................................................................................................................................................... 26

Call-off stock ................................................................................................................................................................22

Ecommerce.................................................................................................................................................................... 27

For more information, see: ................................................................................................................................. 29

Disclaimer
The information provided by Global VAT Compliance B.V. on this pdf is intended for general informational
purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these
pages and cannot be held liable for claims or losses deriving from the use of this information. If you wish to
receive VAT related information, please contact our experts at support@gvc.tax

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Introduction to VAT in Portugal

Portugal's VAT regulations align with the European Union (EU) legislation,
reflecting its status as a founding EU member. As such, Portugal must adhere to
the EU VAT Directives, which offer VAT guidelines. In instances of discrepancies,
the European Directive prevails. For VAT matters, Portugal's territory
encompasses the autonomous regions of Azores and Madeira, where lower tax
rates are applicable for transactions on these islands.

Scope of Taxation

In Portugal, there are taxes applicable on the provision of goods and services in
exchange for payment, as well as on certain intra-Community transactions and
on imported goods brought into the country.

VAT applies to various transactions, including:

✓ The provision of goods and services for payment in Portugal by a taxable

individual acting in that capacity.

✓ The importation of goods.

✓ Acquiring goods within the European Community for payment in Portugal.

✓ Purchasing new means of transport within the European Community for

payment, whether by a taxable entity or a private individual in Portugal.

✓ Selling new means of transport for payment by any individual to a

purchaser in another EU Member State.

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General Information

Tax authority Tax and Customs Authority

VAT in local language Imposto sobre o valor acresentado (IVA)

Currency € Euro
VAT number format PT+9 digits
PT123456789
VAT rates Mainland Portugal - Standard 23%;
Intermediate 13%; and Reduced 6%
Madeira - Standard 22%; Intermediate 12%; and
Reduced 5%
Azores - Standard 16%; Intermediate 9%; and
Reduced 4%
Zero-rated (0%) and exempt
Thresholds
Registration
Established EUR 12,500
Non-established None
Intra-EU Distance sales EUR 10,000
and electronically
supplied services to
consumers (OSS)
VAT Group Not available – must register for VAT
individually
Voluntary Registration Not available
Intra-EU Dispatches EUR 250,000
Intra-EU Arrivals EUR 350,000

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Recovery of VAT by non- Yes
established businesses
Compliance Returns and Deadlines
VAT Returns Monthly (or annual turnover is lower than €
650,000) - 10th of the second following month
Quarterly – 15th of the second following month
Frequency Monthly and quarterly

European Sales Listing 20th of the following month

Intrastat 15th of the following month

Electronic Invoicing Mandatory in Portugal

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VAT Rates
According to the VAT Code in Portugal, the standard rate of VAT in mainland
Portugal is 23% as specified in Article 18.

However, there are different standard VAT rates in Madeira and Azores. In
Madeira, the standard rate of VAT is 22%, while in Azores, the standard rate was
18% before July 1, 2021, and was later reduced to 16% on or after this date.

Standard VAT rate

The standard VAT (Value-Added Tax) rate is the most common VAT rate a
country applies to goods and services. This rate is used for most goods and
services, though there are exceptions like essential items and other specific
goods or services, which may be subject to a reduced rate, as detailed
below.
Rate Good or Services

23% All goods or services not included in the reduced rates

table below

Reduced VAT rates

The Portuguese VAT Code has established two different reduced rates for
Value Added Tax, which are applicable in specific regions. The first reduced
rate of 6% is valid throughout Portugal, except for the autonomous regions
of Madeira where it is 5%, and the Azores where it is 4%. The second
reduced rate of 13% is also applicable throughout Portugal, but with
variations in the autonomous regions of Madeira and the Azores, where it is
12% and 9%, respectively.
Rate Good or Services

6% The reduced rate is applicable to various supplies,

including but not limited to the following:
Basic food items

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 Books, newspapers, and certain periodicals, whether in
physical or electronic format, excluding publications that
consist mainly of video or music content, publications or
books considered obscene or pornographic, and items
bound in materials like fur or silk
Medicinal and pharmaceutical products

Medical and health services offered by private businesses

(excluding those provided under the National Health
Service) that have waived the VAT exemption under Article
12(1)(b) of the Portuguese VAT Code
Products specifically designed for use by people with
disabilities
Orthopedic products;

Equipment intended exclusively or mainly for rescue

services, humanitarian organizations, and fire brigades
Passenger transport, including car rental with a driver

Admission to certain performances, like singing, dance,

music, theater, cinema, and circus shows, as well as
entries to exhibitions, zoos, public botanical gardens, and
aquariums, provided they don't qualify for the VAT
exemption under article 9(13) of the Portuguese VAT Code,
except for entries to pornographic or obscene shows
Various types of hotel accommodation.

The reduced rate is also applicable to construction

activities related to immovable property, subject to
meeting certain conditions
Some cleaning services

Intermediate The intermediate rate is applicable to several supplies,

Rate including but not limited to the following:

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13% Certain types of food products

Certain oil products

Common wines

Agricultural tools and equipment, such as mobile silos,

motor cultivators, motor pumps, electric pumps,
agricultural tractors, and other machines and devices
intended exclusively or mainly for agriculture, livestock, or
forestry
Musical instruments

Restaurant and catering services that exclude alcoholic

beverages, soft drinks, juices, and similar drinks.
0% Zero rated products

Goods and services that are exported out of the country

Intra-Community supplies of goods, where the seller

dispatches or transports the goods to another EU Member
State to a customer who is registered for VAT and has
provided their VAT identification number to the seller
Services related to movable property that is imported to
be worked on in Portugal and then dispatched or
transported out of the country by the supplier, a non-
established customer, or a third party acting on their
behalf
Supplies of goods and services on board vessels used for
shipping, transportation of passengers, commercial,
industrial or fishing activities, rescue or maritime
assistance, or inshore fishing. The transformation, repair,
maintenance, construction, shipping, and rental of vessels
used for these purposes are also exempt with credit.
Supplies of various goods and services to aircraft and
vessels engaged in international transportation, including

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war vessels

Supplies of aircraft and certain fixed aircraft equipment

used by airlines mainly on international routes, including
their modification, repair and maintenance, and
chartering and hiring
Goods and services supplied under diplomatic and
consular agreements entered into by Portugal
Goods and services provided to international
organizations recognized by Portugal or any other EU
Member State under relevant international conventions or
headquarters agreements
Certain supplies of goods and services destined for the
armed forces of other states that are parties to NATO for
the use of those forces or their accompanying civilian staff,
or for supplying their messes or canteens when taking part
in the common defense effort
Gratuitous supplies of goods to disadvantaged persons by
the state, recognized institutions, or non-profit bodies, and
certain supplies of books to government departments, and
educational, cultural, and social institutions
Services related to external and internal Community
transit procedure, exports from the European Union,
temporary importation arrangements with full exemption
from import duty or import warehousing arrangements
Services related to the dispatch or transportation of goods
to other EU Member States, provided the customer is a
taxable person registered for VAT and has used their
identification number to make the acquisition
Certain financial services to persons established outside
the EU, as well as financial services directly related to
exportation
Transport of persons to and from abroad, as well as to or
from the Autonomous Regions of Portugal, and

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 transportation of passengers between the islands in those
regions
Services provided by intermediaries acting on behalf of a
third party, when they participate in exempt transactions
with credit or that occur outside the European Union
Transportation of goods between the islands making up
the Autonomous Regions of the Azores and Madeira, and
between those regions and the mainland or any other
Member State and vice versa
Supplies of gold to the Bank of Portugal, in bars or other
unworked forms
Supplies of goods and services to any state that is a party
to NATO, other than Portugal or the EU Member State for
which the goods are shipped, or services provided, for the
use of those forces or the civilian staff accompanying
them, or for supplying their messes or canteens when
taking part in the common defense effort.
Exempt From VAT
Services provided by healthcare professionals such as
doctors, dentists, psychologists, midwives, and nurses, in
their professional capacity, as well as ambulance
transportation services
Services provided by other paramedical professionals,
including practitioners of non-conventional therapies;
Medical, health, and related services provided by hospitals,
clinics, dispensaries, and similar establishments
Supplies of dental prostheses provided by dentists and
dental technicians.
Services rendered by qualified dental technicians;

Transfers of organs, blood and human milk;

Services provided by public or nonprofit organizations

related to congresses, conferences, and fairs in science,
culture, education, and technology

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Services provided by public or recognized organizations
promoting education for children or young people, welfare
and social services, including homes for the elderly
Certain financial services, including loans, guarantees,
currency transactions, investment fund administration and
management, insurance, and reinsurance transactions
Transactions in immovable property

Food and beverage services provided by employers to

their employees;
Services rendered by a Portuguese sign language
interpreter

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Registration
In Portugal, taxable individuals who engaged in VAT-applicable activities must
register and submit a declaration of commencement of activities prior to starting
their operations, as per Articles 29(1) and 31 (1)(a). The registration process can
be completed either by visiting any tax registry office or by using the online
finance portal available on Portuguese Tax and Customs website.

VAT Identification Number

Upon completion of the registration process, the taxpayer is assigned a tax

identification number in the format of “PT123456789”. This number must be
included on all documents related to VAT, in accordance with the regulations.

OSS Registration

Suppliers of certain inbound supplies of goods and services into EU Member

States can benefit from a simplified registration scheme under the EU One Stop
Shop.

This scheme allows for a single registration in one EU Member State to cover all
qualifying supplies into the EU. It is important to note that the OSS registration
scheme has replaced the Mini One Stop Shop registration that was in effect from
1 January 2015 until 30 June 2021 inclusive.

Taxable Persons

In Portugal, taxable persons are defined as individuals or legal entities engaged

in business activities involving in production. Trade, or supply of goods and
services.

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Mandatory Registration

Under the Portuguese VAT regime, all taxable persons are required to register,
regardless of their turnover or any potential exemption.

However, there is VAT exemption scheme available for small taxpayers who meet
specific criteria, including having a turnover below the exemption scheme
threshold. This scheme is designed to alleviate the administrative burden on
small businesses and allows for certain tax benefits.

Voluntary Registration

In Portugal, there is no voluntary VAT registration scheme available for taxable

persons. It is mandatory for all individuals or entities engaged in taxable activities
to register for VAT at the time they commence their business operations.

Exemptions from Registration

Public Authorities such as state, regional, and local government bodies are not
considered taxable persons in relation to their activities or transactions as public
authorities. Therefore, if these entities do not engage in any other activities or
transactions, they are not required for VAT.

However, businesses with annual turnover that does not exceed the exemption
scheme threshold are required to Portuguese VAT. Although they are exempt
from the requirement to account for VAT, they are still obligated to comply with
other VAT-related obligations, such as keeping proper records and submitting
regular VAT returns.

Group and Divisional Registration

Portuguese VAT law does not allow for VAT grouping. Therefore, even if legal
entities are closely connected, they must register for VAT individually. Separate
divisions of a single legal entity generally cannot be treated as distinct entities
for VAT purposes in Portugal.

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In cases of a company with a branch located in another EU Member State, the
two are considered a single legal person unless it can be demonstrated that the
branch carries out an independent economic activity.

Registration, Non-established businesses,

A non-established business that engages in taxable transactions such as supply

of goods or services, import, or intra-Community acquisitions of goods in
Portugal, is generally required to register for VAT. However, if the reverse charge
mechanism is applicable to a transaction carried out by a non-established
business, there is no need for the business to register the Portuguese VAT.

VAT Representatives

If a non-resident taxable person carries out transactions chargeable to VAT in

Portugal, they must comply with certain obligations, including registering for VAT.
If they do not have a permanent establishment (PE) in Portugal or a head office,
PE, or domicile in another EU Member State, they are required to appoint a tax
representative. This tax representative must be authorized through a letter of
attorney and is jointly responsible with the taxable person for fulfilling the
relevant duties.

However, if the taxable person is not established in Portugal but has a head
office, PE, or domicile in another EU Member State, they may opt not to appoint a
tax representative.

Inbound B2C Services and the One Stop Shop

From 1 July 2021, non-established suppliers who offer Business-to-Consumer

(B2C) services with a Portuguese place of supply can make their registration and
reporting requirements easier across all EU Member States by enrolling in the EU-
wide “One Stop Shop” (OSS) scheme through a single Member State. This means

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that instead of registering for VAT in each EU country where they supply services,
they can register for the OSS scheme in one Member State and report and pay
VAT for all their EU B2C transactions through the portal.

Distance Sales

Starting from 1 July 2021, the registration process for distance sellers within the EU
and for those outside the EU selling low-value goods may be simplified through
the implementation of the EU-wide “One Stop Shop” (OSS) regime. This system
allows sellers to register for VAT in one EU Member State and then declare and
pay VAT owed for sales made to customers in other EU Member States through
single VAT return. This simplifies the registration and reporting process, making it
more efficient for the sellers.

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 Invoice Requirements

Under Article 29 of the Portuguese VAT Code, taxable persons are obliged to issue
an invoice for all supplies of goods and services, including exports and intra-
Community supplies, as well as any advance payments made to them. This
means that whenever there is change made to the taxable amount of a
transaction or the corresponding tax, an invoice must be issued.

Furthermore, when goods are transported within Portuguese territory, they must
be accompanied by a special delivery note or invoice that is electronically
communicated to the Portuguese tax authorities before the beginning of the
transport. This ensures that the tax authorities have the necessary information to
monitor and enforce VAT compliance for these transactions.

Full VAT invoice

Article 36 of the Portuguese VAT Code lays out the requirements for the
information that must be included in an invoice. This includes the following
details:

✓ The names, trade names, or company names and registered office or

domicile of the supplier of goods or service provider, and of the
taxpayer, along with their respective tax identification numbers.
✓ Quality of goods or services supplied, with the information to determine
the applicable VAT rate. If any packaging is to be returned, this must be
indicated on the invoice.
✓ The net price, the applicable VAT rate, and the amount of VAT due.
✓ Justification for non-application of VAT, if applicable.
✓ The date on which goods were made available to the person acquiring
them, services were rendered or payments on account made before the
supply of goods or services, if this date is different from the date of
issue.

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 ✓ Reference to the reverse charge, if applicable. In the case of
intermediaries issuing invoices in transactions subject to the triangular
transaction simplification scheme, a legend should be provided such as
“Triangulation”.

Additionally, invoices must be dated and sequentially numbered in accordance

with Portuguese VAT regulations. These requirements are in place to ensure
accurate record keeping and to facilitate VAT compliance and enforcement.

Simplified Invoice

According to Article 40 of Portuguese VAT Code, retailers can issue simplified

invoices in specific situations. If they are supplying goods to non-taxable
individuals and the total amount does not exceed € 1,000, or if they are making
other types of supplies and the invoice is no more than € 100.

Electronic Invoicing (SAF-T)

Portuguese taxpayers are required to submit monthly electronic reports to the

Tax Authority. These reports should include information on all invoices issued, as
well as simplified invoices, debit notes, and credit notes. The format used for
these reports are typically the OECD’s Standard Audit File-Tax (SAFT-PT). The
reports must be submitted by the 5th day of the following month after the
documents were issued.

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VAT Returns

In Portugal, under Article 29 and 41 of VAT Code, taxable individuals are required
to submit periodic tax returns on a monthly or quarterly basis, depending on their
annual turnover. Taxable persons with an annual turnover of € 650,000 or more
in the preceding calendar year are required to file monthly tax returns. On the
other hand, taxable individuals with an annual turnover of less than € 650,000 in
the previous calendar year generally file quarterly tax returns, but they have the
option to file monthly returns if they choose to do so.

Returns must be submitted by taxable persons under Article 41 of VAT code. The
due date for filing return is the 20th day of the second month after the end of the
relevant monthly or quarterly period being reported on. There is an exemption for
the month of June and the second quarter, where returns must be submitted by
20th September.

Interest and Penalties

Unpaid VAT liability in Portugal is subject to accruing interest at a variable rate

that changes on an annual basis.

Exempt Supplies or Equivalent

There are two types of exemptions:

✓ Ordinary exemptions.
✓ Exemptions with credit.

Ordinary exemptions, also known as incomplete exempt or simply exempt refer

to supplies on which no VAT is charged, no corresponding VAT deduction can be
made for the associated input VAT expense. This means that the supplier cannot
recover any VAT paid on goods or services purchased for the purpose of making
these supplies.

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Exemptions with credit, on the other hand, are supplies that carry a right to a
related input tax deduction. This means that although no VAT is charged on the
supply, the supplier can recover any VAT paid on any goods or services
purchased for the purposes of making these supplies. These exemptions with
credit are also known as zero-rated supplies.

Electronic Filing

In Portugal, it is obligatory to submit tax-related documents electronically. This

means that the taxpayers are required to use electronic means to file their tax
returns, submit invoices and fulfill other tax-related obligations.

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VAT Recovery

Taxable persons are typically allowed to deduct input VAT on expenses related to
their taxable activities including input VAT on intra-Community acquisitions and
imported goods. However, there are certain restrictions on the deduction of input
VAT.

Expenses related to the following, generally do not give the right to deduct input
VAT, even if incurred for a taxable activity:

✓ Light vehicles, pleasure boats, helicopters, aircraft, and motorcycles that

are considered to be used for nonworking purposes. However, if these
goods are intended for sale or are used in a business activity, such as
rental cars, the expenses can give a right to VAT deduction. Deductions
may be allowed for electric or hybrid vehicles.
✓ Fuel used in motor vehicles, except for diesel, liquefied petroleum gas,
natural gas, and biofuels. In these cases, 50% of the VAT is deductible. VAT
on these fuels is 100% deductible if they are used for heavy passenger
vehicles, licensed public transport, machines other than registered
vehicles, tractors for agriculture, and vehicles designed for transporting
goods over 3,500 kilograms. Expenses related to electricity for electric or
hybrid vehicles are generally deductible.
✓ Expenses related to transport and business travel, representation fees,
accommodation, and meals.
✓ Entertainment or luxury charges, which are considered not to constitute
ordinary operating expenses.
✓ Secondhand goods, collections of works of art, and antiques, if the taxable
amount of the supply of these is equal to the difference between the selling
price and the purchasing price.
Under Article 29 of the Portuguese VAT Code, taxable individuals are required to
issue invoices for all goods and services supplied, including exports and supplies

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within the Community, as well as for any advance payments received.
Additionally, a taxable person can reclaim input tax paid on goods and services
acquired for business purposes. Generally, this recovery is achieved by
deducting the input tax from the output tax charged on the supplies they
provide.

Exempt Supplies or Equivalent

Article 9 of the Portuguese VAT Code provides for exemptions on certain supplies,
subject to certain conditions and requirements.

These include:

✓ Services provided by healthcare professionals such as doctors, dentists,

psychologists, midwives, nurses, and ambulance transportation services.
✓ Services provided by other paramedical professionals, including
practitioners of nonconventional therapies.
✓ Medical, health, and related services provided by hospitals, clinics,
dispensaries, and similar establishments. (Note that there is an option to
tax available for these establishments.)
✓ Supplies of dentures and other dental prostheses provided by dentists and
dental technicians.

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Reverse Charge Mechanism

In accordance with Articles 194-199b of the EU VAT Directive, all EU Member

States, including Portugal, have implemented reverse charge provisions. These
provisions allow Member States to designate the recipient of certain cross-
border services and domestic supplies as the taxable person liable for paying
VAT.

Under the reverse charge mechanism, the recipient of the goods or services
must self-assess and pay the VAT due to the relevant tax authority, rather than
the supplier. This mechanism is generally applied in situations where it is difficult
for the supplier to determine the correct VAT rate or where there is a high risk of
VAT fraud.

Reverse charge provisions are designed to simplify VAT reporting and

enforcement, as well as to combat tax evasion and fraud in cross-border
transactions. They allow for more efficient allocation of VAT liability and facilitate
cooperation between Member States in the fight against VAT fraud.

Local Reverse charge

Goods that fall under the reverse charge mechanism in domestic supplies
include items like portable computers, mobile phones, game consoles, and metal
scrap. Services under this category typically include construction services from
subcontractors and the sale of emission allowances, along with services
provided by the government.

Furthermore, the reverse charge also applies to goods supplied by a foreign

taxpayer to a Portuguese taxpayer when the foreign taxpayer does not have a
business or fixed establishment in Portugal. Such transactions exempt the foreign
taxpayer from needing to register for VAT in Portugal.

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Non-established businesses

For non-established companies in Portugal, VAT on domestic supplies of goods

to Portuguese companies must be handled by the purchasing companies. This
implies that foreign entities not registered for VAT in Portugal should not apply
VAT on their domestic supplies of goods to Portuguese businesses, instead, the
VAT is managed on a reverse charge basis by the purchasers.

Regarding service provision, the reverse charge mechanism is used when

services are provided by non-established companies in Portugal (those without
a local seat or business location) to a VAT-registered purchaser in Portugal. This
is irrespective of the foreign service provider's VAT registration status in Portugal.
However, this rule does not apply to services related to certain real estate for
which the supplier is VAT registered in Portugal.

Call-off stock

A "call-off stock" scenario arises when a non-resident supplier sends products to

be stored in the customer's country, often at the customer's premises. The
consumer takes the products from the stock as needed. It is only at this moment
of withdrawal that the customer legally acquires ownership of the goods from
the overseas supplier.

Simplifying the EU's call-off stock regime

On January 1, 2020, the EU standardized call-off stock arrangements across its

member states. According to the new rule, the physical movement of goods to
another EU Member State doesn't constitute a vatable transaction; instead, it's
the later transfer of ownership of these goods that does. This movement is
considered an intra-community supply of goods by the supplier and an intra-
community acquisition by the recipient.

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The call-off stock rules apply only when certain criteria are met:

✓ The supplier, or a third party on their behalf, must send goods to another
Member State for a recipient who will later become the owner under a pre-
existing agreement.
✓ The supplier should not have an established business or a fixed
establishment in the Member State where the goods are delivered.
✓ The goods' recipient, who will later acquire ownership, must be VAT-
registered in the Member State where the goods are supplied.
✓ The supplier is required to maintain a 'call-off stock register' detailing the
transfer of goods to support the call-off stock simplification claim. This
transfer must also be recorded in the EC Sales List (ESL), identifying the
recipient and their VAT ID in the Member State of supply.
✓ The actual supply of goods to the intended recipient from the stored
location must happen within 12 months of the goods' arrival.

If these conditions are met, the call-off stock regime is mandatorily applied.

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Intrastat

The "Instituto Nacional de Estatística" (INE) in Portugal has two separate

departments for Intrastat reporting. One department handles reports for
companies based in the Mainland and the Autonomous Region of the Azores,
while the other is for those in the Autonomous Region of Madeira.

To provide essential data on trade among EU Member States, the Intrastat

system was introduced. It tracks trade between domestic businesses and those
in other Community countries, offering vital trade information.

There are two distinct types of declarations based on the nature of the trade:

✓ INTRASTAT Declaration – Arrival

✓ INTRASTAT Declaration – Dispatch

These involve monthly reporting on the arrival and dispatch of goods during the
specified reporting period.

Companies must submit INTRASTAT declarations, either in paper format or

electronically, by the 15th day of the month following the reporting period.

Paper filing

Companies have the option to submit their tax returns to the Taxing Authorities
via mail. It is advisable for these companies to retain copies of all returns sent by
email for a duration of two years.

Electronically

Via Webinq: (https://webinq.ine.pt/Private/Login.aspx ). For this purpose, a user-

id and a password must be obtained.

Thresholds

In Portugal, the reporting threshold for goods is the following:

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Dispatches:

Type of Return Threshold

Detailed with the statistical EUR 6.500.000
procedure (Mainland and
Autonomous Region of Azores)
Detailed (Mainland and EUR 250.000
Autonomous Region of Azores)
The autonomous region of Madeira EUR 25.000

Arrivals:

Type of Return Threshold

Detailed with the statistical EUR 5.000.000
procedure (Mainland and
Autonomous Region of Azores)
Detailed (Mainland and EUR 350.000
Autonomous Region of Azores)
The autonomous region of Madeira EUR 25.000

Per the regulations set by the Instituto Nacional de Estatistica, should a company
surpass the specified threshold at any point during the year, it is required to
submit Intrastat returns starting from the month of the initial transaction. For
instance, if a company only exceeds the threshold in April but had transactions
as early as January, it must file Intrastat returns starting from January.

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EC Sales List

Portuguese taxpayers involved in EU transactions are required to file a summary

statement, known as an "EC Sales List" (ESL), detailing their EU-based goods and
services supplies. Adherence to ESL reporting, as mandated in Article 29 of the
Portuguese VAT Code and Article 30 of the RITI, is essential for transaction
exemption with credit. This statement must enumerate details about customers
who are VAT-registered in EU Member States other than Portugal, including the
total value of supplies in euros for the relevant taxable period.

From January 1, 2020, following an EU "Quick Fix," the ESL also needs to report
details on recipients involved in call-off stock arrangements. The filing frequency
of the ESL is electronic and monthly for those with monthly tax returns, and
quarterly for those with quarterly returns. However, for intra-Community goods
supplies exceeding 50,000 euros in the current or any of the past four quarters,
the statement must be filed monthly.

The ESL submission deadline is the 20th day of the month following the reporting
month or quarter.

VAT for digital service providers

The expansion of digital services has led to significant transformations in global

VAT regulations. Digital products or e-services, intangible goods or services sold
online, come under this category. According to EU law, any product that is stored,
delivered, and used electronically is a digital product. This includes products or
services provided through email, downloads from the Internet, or access via a
website. Examples include:

✓ E-books, images, movies, and videos, available through platforms like

Shopify or third-party services such as Netflix, categorized as "Audio, visual,
or audio-visual products" for tax purposes.

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 ✓ Music available for download or streaming, purchased as MP3s or through
platforms like SoundCloud or Spotify, typically classified in the audio
category.

✓ Cloud-delivered software and services, including Software-as-a-Service

(SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service
(IaaS).

✓ Web-related services like website creation, web hosting, and Internet

Service Providers (ISPs).

✓ Online advertising and affiliate marketing.

For digital, telecommunication, or broadcasting services in a business-to-

business (B2B) setting, the place of supply is deemed to be where the recipient is
located. In cases where neither the supplier nor the customer is established in
Portugal, Polish VAT should not be applied.

Ecommerce

On July 1, 2021, the EU introduced its e-Commerce VAT Package, replacing the
existing distance selling regulations and expanding the Mini One Stop Shop
(MOSS). This marked a major shift in VAT rules for business-to-consumer (B2C)
transactions involving goods and services, affecting both EU imports and intra-
EU trade. The new package establishes a significantly lower pan-EU VAT
threshold of EUR 10,000 (EUR 0 for businesses outside the EU), expanding VAT
obligations for most businesses to a wider array of supplies.

From this date, all B2C sales of goods to EU consumers are subject to VAT in the
destination member state. VAT reporting is streamlined through the "One Stop
Shop" (OSS) systems, allowing sellers to report and pay VAT via a single member
state's tax portal. The Import OSS (IOSS) system facilitates suppliers and
electronic interfaces that sell imported goods into the EU in collecting, declaring,

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and paying VAT, shifting the responsibility from the buyer at customs clearance
to the seller.

However, using OSS is optional. As a result, VAT on intra-Community distance

sales of goods and all types of cross-border B2C services can be settled in the
Member State of consumption as the place of supply. Previously, this was only
possible for electronically supplied services and similar types.

The scheme's main advantages are:

✓ The ability to register for VAT electronically in a single Member State,

eliminating the need to register in every Member State where goods or
services are sold.

✓ The submission of a single electronic return to the Member State where the
business is identified, though the VAT rates applied are those of the
consumer's country.

✓ Collaboration with the tax authorities of the Member State where the
business is established, even for cross-border sales.

VAT GUIDE PORTUGAL 28

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For more information, see:

Government Agencies

Portuguese VAT Code

Tax and Customs website
Intrastat filing, Statistics Portugal

European Union

Council Directive 2006/112/EC on VAT (the “EU VAT Directive”)

European Commission VAT portal
European Commission VIES VAT number validation web tool

One Stop Shop (OSS)

European Commission guidance on the One Stop Shop (OSS)

Disclaimer
The information provided by Global VAT Compliance B.V. on this pdf is intended for general informational
purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these
pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to
receive VAT related information please contact our experts at support@gvc.tax

VAT GUIDE PORTUGAL 29

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 www.globalvatcompliance.com
info@gvc.tax / Loire 192, 2491AM, The Hague, The Netherlands / +31 70 308 3110