Portugal VAT Rates

Portugal follows European Union (EU) value added tax (VAT) rules but determines its own rates above the EU minimum, which is 15%.

Autonomous region rates:

• Madeira: 22% standard, 12% intermediate, 5% reduced

• Azores: 16% standard, 9% intermediate, 4% reduced

Compliance with VAT (registration, returns, Intrastat, EC Sales Lists) is governed under the Portuguese VAT Code (CIVA), enforced by the VAT Service Department within the Directorate General of Taxes. This is aligned with EU VAT directives.

Certain goods and services are exempt from VAT in Portugal, including:

• Financial and insurance services
• Medical and healthcare services
• Educational services and non-profits
• Cultural and sporting events
• Rental of immovable property (with exceptions)

Other supplies like exports are zero-rated, allowing VAT deduction.

A valid VAT number is required in Portugal for any business, professional, or commercial activity, whether resident or non-resident.

For resident businesses, a simplified VAT exemption applies to businesses with annual taxable turnover up to €15,000. Businesses earning between €15,001 and €18,750 may remain exempt for the remainder of 2025 but must register for VAT by January 2026. If turnover exceeds €18,750, immediate VAT registration is required and the standard VAT regime applies from the first day of the following month.

There is no registration threshold for non-resident businesses. Any non-established business carrying out taxable transactions in Portugal — such as importing goods, local sales, distance selling, or storing inventory — must register for VAT immediately.

Distance sales of goods and digital services within the EU are subject to the €10,000 EU-wide threshold. Once exceeded, VAT registration is required under the One-Stop Shop (OSS) scheme or directly in Portugal.

Learn more about VAT registration in Portugal.

VAT-registered businesses in Portugal are required to submit periodic VAT returns reporting the VAT charged on sales and the VAT paid on purchases. Returns are typically filed quarterly or monthly, depending on the taxpayer’s turnover and type of activity. Monthly VAT returns are mandatory for businesses with an annual turnover exceeding €650,000, while others may file quarterly.

In addition to regular VAT returns, businesses must also submit an annual VAT return and may be required to file SAF-T (Standard Audit File for Tax) submissions, which provide detailed transactional data, as well as Intrastat declarations for intra-EU trade. All filings must be submitted electronically to the Autoridade Tributária e Aduaneira (AT) through the government’s online tax portal.

Learn more about VAT returns in Portugal.

Portugal allows VAT-registered businesses to defer import VAT via reverse charge, reporting it in their VAT return rather than paying upfront at customs. This applies upon approval and is reflected in designated boxes in the VAT return.

Intrastat is required when taxable goods or services cross Portuguese borders within the EU. Portugal’s Intrastat thresholds for 2025 are:

• Arrivals (imports): €650,000

• Dispatches (exports): €600,000

  
  

Declarations are due by the 15th of the month following the reporting period.

Businesses supplying goods/services to VAT-registered EU companies must submit EC Sales Lists. These are filed alongside VAT returns.

Portugal applies EU call-off stock rules: foreign suppliers need not VAT register if goods are held at a customer’s premises under their control and sold within 12 months. However, consignment stock stored under supplier control in Portugal requires VAT registration.

Invoices must adhere to strict CIVA specifications including supplier/recipient VAT IDs, descriptions, dates, VAT rates, and total VAT. Simplified invoices are allowed for low-value transactions. E-invoicing is permitted under certain conditions.

Businesses registered for VAT in Portugal can deduct input VAT on eligible expenses. Event organisers may be eligible for enhanced VAT recovery, including nearly full deduction on hospitality-related VAT.

Portugal was the first country to adopt the OECD’s Standard Audit File for Tax (SAF-T), known locally as Ficheiro SAF-T (PT). It applies to VAT-registered businesses and supports the Portuguese Tax Authority’s audit and reporting processes.

Currently, most VAT-registered businesses must submit SAF-T files monthly. These submissions include:

• Sales and purchase invoices
• General ledger transactions
• Customer and supplier master data
• Tax codes, inventory, and payment details

Businesses must submit monthly SAF-T invoicing files by the 5th day of the following month. This applies to both resident and non-resident businesses issuing VAT invoices in Portugal.

Files must follow the XML format specified by the tax authority. Businesses are required to retain SAF-T records for inspection and can face penalties for non-compliance, including failure to generate or submit files when requested.