VAT in Portugal

1. What is the VAT rate in Portugal?

The standard Value Added Tax rate in Portugal is 23%, with some exceptions of 13% for restaurant services and 6% for some goods and services, mainly foodstuff. Medical and banking services are exempt from VAT. If the annual turnover of a Portuguese company is less than 9,976 EUR, then VAT does not apply.

2. How can I get a VAT refund in Portugal?

If you want a refund for VAT in Portugal, you can access the new system of an electronic portal. You have to electronically submit your completed application through the Portuguese tax portal not later than 30th September of the following year. The documents requested for proof of eligibility for VAT refund, like invoices, may be scanned and uploaded. The period for the VAT claim cannot be longer than one year or shorter than three months and the minimum amount is 400 EUR.

3. How can I register for VAT in Portugal?

First of all, it is necessary to check if the company is subject to VAT tax. If so, the founders, or the legal representative must register as soon as possible. The application for VAT registration in Portugal contains the company's articles of association, registration certificate, names and addresses of the shareholders and directors and the power of attorney for the legal representative empowered to fill and submit the application. After the VAT registration in Portugal is completed, companies receive a VAT number that is automatically transferred to the European VIES register when the company engages in trading.

4. How does intra-community VAT work in Portugal?

As part of the European Union, Portugal joined the system of VIES (VAT Information Exchange System) which has the role to avoid that companies abuse of the zero-rated VAT available for intra-community transactions between member states. If the company you are dealing with is also registered in the European Register, then you are not supposed to calculate the VAT on the invoices anymore. As a consequence, the trade will be exempt from VAT.

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