Portugal VAT

Portugal Value Added Tax was introduced in 1986 as part of the entry of the country into the European Union.  It is termed Imposto sobre o valor acrescentado (IVA).

There was a transition period, and the full regime came into force in 1989.  As with all other member states, Portugal is required to follow the EU’s rules on VAT registrations, compliance, returns, Intrastat and EC Sales Lists.  The Portuguese VAT rules are contained within the VAT Code.  It is overseen by the Department of the VAT Service, which is part of the Directorate General of Taxes in the Ministry of Finance.  This issues official Circulars and Decisions in support of the VAT Code.

Foreign businesses importing or trading goods or services in Portugal may be required to VAT register as a non-resident trader in Portugal.  It would then also be obliged to following local compliance, reporting and payment processes.

Should you register for Portuguese VAT?

Portugal requires non-residents to register if the are performing any of the following trading (note – this is not an exhaustive list):

  • Importing goods into Portugal from outside of the European Union
  • Buying and selling goods within Portugal
  • Selling goods over the internet to Portuguese consumers.  This is subject to a local VAT registration threshold
  • Holding goods in a consignment stock warehouse for sale to local customers
  • Charging admission to events or exhibitions
  • If a company is otherwise a non-VAT trader, but is receiving services in the Poland under the reverse charge rule.
  • The self supply of goods.

Portugal changed the rules on VAT registering foreign service providers in 2010.  This was brought on by the EU VAT Package, which reduced the number of situations that required a foreign services trader to register for Portuguese VAT.

Note that providers of electronic, broadcast or telecoms services to consumers in Portugal only have to VAT register in one EU country under the MOSS scheme to file a single return covering all 27 member states.

You can read more about Portuguese VAT on our VAT compliance, VAT registration or other related briefings.

Need help with your Portuguese VAT compliance?

Researching Portuguese VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade. 

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