Learn about Portugal’s 2026 VAT rates, registration rules, invoicing, and compliance tips for businesses selling goods or digital services.
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VAT, or value-added tax, is a consumption tax. It differs from sales tax, however, in that it is paid by businesses at each stage of production and distribution, so each company pays tax as they add value to a product. And except for the final consumer, those companies can claim a refund on the VAT they pay. The final consumer, in the end, bears the full VAT amount. Many countries have a VAT system in place, including all European Union (EU) countries, which includes Portugal.
Portugal introduced VAT, called imposto sobre o valor acrescentado (IVA), when it entered the European Communities (which later became the EU). So VAT has been in place in Portugal since 1986, although it was not fully implemented until 1989.
Nonresidents who do certain types of business in Portugal must register and remit VAT.
Portugal’s VAT follows the EU VAT framework, but EU countries can set their own rates and some regulations within that framework. The standard VAT rate in Portugal is 23%, although some goods and services are taxed at one of the country’s reduced rates. Portugal’s VAT rates are:
Portugal has two autonomous regions: Madeira and the Azores, and both have different tax rates:
In Portugal, legal entities and self-employed individuals conducting business may be required to register with the Portuguese Tax and Customs Authority, or the Autoridade Tributária e Aduaneira (AT), and begin complying with local VAT rules.
However, the specifics of when you must register depend on whether you are a resident company doing business in Portugal or you are sending goods and services into Portugal without a presence there.
It's critical that your company is aware of the rules regarding registration, as failure to follow them could lead to audits, financial penalties, and reputational damage.
In Portugal, the registration threshold for resident businesses is €15,000 in annual sales. However, if a company has only one taxable transaction that does not exceed €25,000, that transaction may be treated as an “isolated act.” In such a case, VAT must be charged on the transaction, but the business does not need to complete full registration.
Businesses that don’t reach this registration threshold can avoid registration only if:
You are also required to register if your company stores products in Portugal or if your business participates in a Fulfilled by Amazon program that includes Portugal.
The EU also has a €10,000 distance-selling threshold that applies across all EU countries, including Portugal.
Under this rule, if your total annual cross-border sales (B2C) into other EU countries don't climb above €10,000, your company can declare and pay VAT for all EU-wide sales on a single return filed in your home country. However, once sales exceed €10,000 in a calendar year, you must begin charging VAT at the rate of the customer's country of residence or register for the One-Stop Shop (OSS) scheme. (If your total sales are below €10,000, you can also use the OSS.)
Non-EU businesses do not have a €15,000 exemption. They are required to register immediately once they engage in any taxable activities. This requirement kicks in upon the very first taxable transaction a company completes in Portugal.
Your nonresident business must register if you:
If you are required to register for VAT in Portugal, you must submit a declaration of commencement of activity. After registering, you'll receive a VAT number from the Portuguese authorities. This number will be used for all VAT-related transactions. It can take a few weeks to complete this registration process.
If your business is not based in the EU and you are required to register for VAT in Portugal, you must appoint a fiscal representative. A fiscal representative is a local entity that your business appoints to be in charge of managing your VAT obligations.
When you appoint a fiscal representative, the representative takes responsibility for:
Fiscal representatives are established in the relevant country and must meet strict requirements to become licensed. They are responsible for verifying the accuracy of the tax declarations your company makes, and they assume responsibility for handling all tax and administrative obligations.
Accountants, lawyers, tax advisors, and auditors often serve as fiscal representatives, and they typically must provide financial security.
VAT rates and the taxability of products vary across EU countries, so it's essential to understand what transactions you are required to charge VAT on. The rules also differ for sales to businesses (B2B) and sales to consumers (B2C).
EU countries may apply a reverse charge to supplies of goods and services made by businesses that are not established locally, and Portugal has chosen to do so.
A reverse charge applies when:
With the reverse charge, the obligation to report and pay VAT shifts from the supplier to the customer. The supplier issues an invoice without VAT, and the Portuguese business accounts for the VAT in its return (both input and output tax). The reverse charge does not apply when the customer is a private individual who is not VAT-registered.
Many goods and services are subject to VAT in Portugal.
Products taxed at the standard rate, 23%, include:
Products taxed at the reduced rate, 13%, include:
Products taxed at the super-reduced rate, 6%, include:
Zero-rated products include:
A small number of products are exempt from VAT in Portugal, including some nonprofit services and healthcare or medical care provided by professionals. The main difference between zero-rated goods and exempt goods is the ability to reclaim input VAT. When a business makes zero-rated sales, it can reclaim the VAT it has paid on its expenses. When it makes exempt sales, it cannot.
In Portugal, different rules govern B2B sales and B2C sales. The rules also differ based on where the seller and buyer are located.
Domestic transactions (within Portugal):
Intra-EU transactions:
Transactions with non-EU suppliers:
When a company sells goods on a marketplace, the marketplace may become responsible for collecting VAT on certain sales. The marketplace is considered a deemed seller if it facilitates the sale by:
Marketplaces that meet these requirements are treated as deemed sellers and are responsible for collecting VAT when:
If your company sells goods through a marketplace facilitator, you may not be personally responsible for collecting and paying the VAT on those goods since the marketplace is treated as the seller and therefore has VAT compliance obligations.
Under Portugal's VAT rules, your company can deduct input VAT, or VAT paid on purchases, if you are using the purchased items for your business. For example, VAT may be deductible if it is paid on:
VAT paid on personal purchases isn't deductible, and companies that claim deductions are required to keep records, including invoices, to prove their eligibility for the deduction.
There is a four-year statute of limitations for VAT collection in Portugal, with the clock starting at the beginning of the year after the one when VAT was due.
An extended, 12-year statute of limitations applies in situations involving deposit and securities accounts held in financial institutions outside of Portugal.
If a criminal investigation is opened, the statute of limitations is extended until one year after the close of the process or its res judicata.
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If your company is obligated to register in Portugal and to collect and remit VAT, it's critical that you remain compliant with these rules to avoid penalties:
The Portuguese VAT code requires taxable entities to issue invoices for all supplies of goods and services. This includes for exports and for intra-community supplies. Invoices must also be issued in cases where advance payments are made and situations where changes occur to taxable transactions.
Invoices must be dated and sequentially numbered, and must include specific information such as:
If a seller is supplying goods to a non-taxable individual and the total amount of the sale is equal to or below €1,000 or if the seller is making other supplies and the invoice is equal to or below €100, a simplified invoice is allowed.
If the transaction is a B2G (business-to-government) transaction or a transaction between specific businesses, e-invoicing is required. It's optional in other circumstances, and an e-invoice alone is sufficient for B2C transactions with no requirement for printing paper invoices.
VAT returns in Portugal must be submitted electronically through the Portal das Finanças, which is the Portuguese Tax and Customs Authority's website.
VAT returns must be either monthly, if your turnover is €650,000 or more in the previous calendar year, or quarterly, if there is a turnover of less than €650,000 in the prior calendar year. An annual return is also due.
VAT returns are due by the 20th day of the second following month, and payments are due by the 25th day of the second following month. Annual returns are due by July 15 of the following year.
Businesses must keep VAT records for 10 years in Portugal. Required records include:
Portugal also mandates the use of the Standard Audit File for Tax (SAF-T) to compile records including invoices, accounting records, and records of transactions. Beginning in 2027, this will be mandated throughout the EU.
Noncompliance can have serious consequences including:
You'll want to avoid these consequences, as the fines and penalties can be costly.
To stay compliant with Portuguese VAT regulations:
Taking these steps can help ensure that your business doesn't run afoul of Portuguese laws on VAT collection, so you can remain in good standing without fear of audits or penalties.
Manually managing VAT compliance in Portugal can be a challenge, especially if Portugal is just one of many countries where you have tax obligations to fulfill. You should strongly consider using a software solution that automates the process for you.
Numeral can help. Numeral streamlines the VAT process for companies around the world, and can assist you with remaining compliant in Portugal and more than 55 other countries. Numeral takes care of:
With Numeral's help, complying with VAT rules will take you less than five minutes a month, so you can do business almost anywhere in the world without worrying about your tax collection obligations.
Portugal's VAT rules can be complicated, but compliance doesn't have to be.
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