Portugal

The basics

VAT in Portugal is known as IVA (Imposto sobre o Valor Acrescentado), and it is charged at three rates that differ by region.

On the mainland the standard rate is 23%. An intermediate rate of 13% covers restaurant and catering services, wine, mineral water and a range of foodstuffs, while a reduced rate of 6% applies to basic food, books, newspapers, pharmaceutical products, hotel accommodation and domestic passenger transport.

The two autonomous regions apply their own, lower rates. Madeira charges 22%, 12% and 5%; the Azores charge 16%, 9% and 4%. The distinction matters for any seller shipping to the islands: the rate follows the place of supply, not the seller’s registration.

VAT registration

Portugal sets no registration threshold for non-resident businesses. Registration is required from the first taxable transaction, and holding stock in the country — including inventory placed there through Amazon FBA — is on its own enough to trigger it. The domestic exemption for small businesses, €15,000 of annual turnover from 2025 onward, is available only to businesses established in Portugal.

The other common trigger is distance selling. Since the EU replaced country-specific thresholds in July 2021, a single EU-wide threshold of €10,000 applies to cross-border B2C sales; above it, a seller either registers locally or reports through the OSS (One Stop Shop) scheme.

Applications are filed with the Autoridade Tributária e Aduaneira (AT) through a Declaração de Início de Atividade, once the company holds a Portuguese tax number. Non-EU businesses must have their fiscal representative in place before the application is submitted. The process takes around six to eight weeks from complete documentation, and the number issued takes the form PT followed by nine digits.

Fiscal representation

Any business established outside the EU or EEA must appoint a fiscal representative in Portugal. The representative has to be domiciled in Portugal and registered for VAT there, acts as the point of contact with the tax authority, and is jointly liable for the VAT debts of the business it represents.

Businesses established in another member state, or in Norway or Iceland, can register directly and are not obliged to appoint one, though many do for administrative convenience.

British businesses are the exception worth flagging. The EU-UK mutual assistance protocol allows member states to waive fiscal representation for UK companies, and several have. Portugal has not: a UK-established seller is treated like any other non-EU business and needs a representative.

Filing, deadlines and penalties

Filing frequency follows turnover in the previous calendar year. Businesses that reached €650,000 file monthly; those below file quarterly. Both regimes share the same calendar: the return is due by the 20th day of the second month following the reporting period, and payment by the 25th of that month. All filings are electronic.

From January 2026 the responsibility for the regime itself shifted onto the taxpayer. The AT no longer reclassifies businesses between monthly and quarterly filing automatically, and the previous three-year lock-in has gone — the applicable periodicity has to be declared, and doing nothing no longer counts as staying compliant. The annual IES (Informação Empresarial Simplificada) is due by 15 July of the following year.

Penalties are set by the Regime Geral das Infrações Tributárias. A company that files late, or not at all, faces a fine of between €300 and €3,750 (€150 to €1,875 for individuals). Late payment of the tax itself is penalised at between 30% and 100% of the amount due, and compensatory interest runs at 4% a year on top.

Certified invoicing, ATCUD and SAF-T

Portugal is stricter than most of the EU about how an invoice is produced, and this is where foreign sellers are most often caught out. Since 1 January 2023 non-resident businesses registered for Portuguese VAT have been subject to the same rules as residents: invoices must be issued from billing software certified by the AT, and each one must carry an ATCUD unique document code and a QR code.

Certified software also means structured reporting. The SAF-T (PT) billing file, covering the invoices issued in a month, must be submitted to the AT by the 5th of the following month.

An ERP that is perfectly acceptable everywhere else in the EU will not satisfy these requirements, so the invoicing setup needs to be settled before the first Portuguese sale rather than after it.

Intrastat declarations

Businesses moving goods between Portugal and other member states must file Intrastat declarations once the annual value of that trade exceeds €650,000 for arrivals or €600,000 for dispatches. Both thresholds are unchanged for 2026. Declarations are filed monthly and electronically with Instituto Nacional de Estatística (INE).

Reverse charge

The reverse charge shifts the obligation to report and pay Portuguese VAT from the supplier to the customer. It applies to intra-EU cross-border supplies and to certain domestic transactions, including construction services and supplies made by a non-established business to a Portuguese VAT-registered customer. Where it applies, it reduces — but does not always remove — the need for a foreign supplier to register locally.