Portuguese VAT returns - Avalara

Domestic and foreign businesses registered for VAT in Portugal must submit periodic VAT returns. The filing frequency depends on their annual turnover in the previous year:

Businesses with turnover of €650,000 or more must file monthly returns.
Businesses with turnover below €650,000 may file quarterly returns.
All VAT returns — whether monthly or quarterly — as well as annual recapitulative returns (IES/DA) must be submitted electronically via the Portuguese Tax Authority’s portal.

Filing frequency and deadlines

Monthly returns: Due by the 20th day of the second month following the reporting period. VAT payments are due by the 25th day of the same month after the filing period.

Quarterly returns: Due by the 20th day of the second month after the quarter ends, with payment due by the 25th.

Annual VAT returns (IES/DA): Due by 15 July of the following year.

Information required on Portuguese VAT returns

Businesses must report the following when completing a VAT return:

Total sales and purchases (including exempt transactions)

Intra-EU acquisitions and supplies

Imports and exports

Reverse charge transactions

VAT collected (output VAT)

VAT deductible (input VAT)

Net VAT payable or refundable

VAT deductions

VAT-registered businesses in Portugal can deduct input VAT incurred on goods and services used for taxable business purposes, including:

Office supplies, services, and capital expenditures

Import VAT

VAT on business travel and accommodation (subject to standard deductibility rules)

Filing deadlines overview

Type of return	Frequency	Filing deadline	Payment deadline
VAT return	Monthly	20th day of the second following month	25th day of the second following month
VAT return	Quarterly	20th day of the second following month	25th day of the second following month
Annual VAT (IES/DA)	Annual	15 July of the following year	N/A

VAT return penalties

Portuguese tax law imposes the following penalties for non-compliance with VAT return obligations:

Late filing: Penalties range from €150 to €3,750 for individuals, and €300 to €3,750 for businesses (legal persons).

Omissions or inaccuracies: Penalties range from €375 to €45,000 for businesses.

Late payment of VAT: Penalties from 30% to 100% of VAT due, capped at €45,000 for negligence or €165,000 for intentional behaviour. Interest is charged at 4% annually.

Other compliance failures (e.g., invoice errors or missing records) also carry specific fines depending on the severity.

How VAT credits are recovered

If input VAT exceeds output VAT in a reporting period, a VAT credit arises. This is generally carried forward to offset future VAT liabilities. However, if the credit is large — exceeding thresholds such as €3,000 — or if the business is ceasing activities, a refund may be requested. In cases of large credits, the tax authority may request a bank guarantee to secure the refund.

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