VAT in Portugal
If you are a foreign company selling to or trading with Portugal, you need to deal with Portuguese VAT (IVA). The standard rate on the mainland is 23%; there are two lower rates, as well as special, lower rates for Madeira and the Azores. If you hold stock, engage in distance selling, or import goods in Portugal, you may become liable for VAT from the very first transaction. Below are the rates, thresholds, and rules you need to know before getting started.
Portuguese VAT rates, thresholds, and formats
| Conditions | Rate or rule |
|---|---|
| Standard rate | 23% on the Portuguese mainland. The VAT is called IVA (Imposto sobre o Valor Acrescentado). |
| Reduced rates | 13% (intermediate rate) and 6% (super-reduced rate) on the mainland for selected goods and services. |
| Madeira and the Azores (special rates) | Madeira: 22% / 12% / 4%. The Azores: 16% / 9% / 4%. The autonomous regions have their own rates, which are lower than those of the mainland. |
| Zero rate (0%) | Applies to, among other things, international passenger transport and EU supplies of goods (intra-Community supplies). |
| Registration threshold | There is no threshold for foreign companies without a fixed place of business; registration is required from the first VATable transaction. Portuguese companies have a threshold of EUR 15,000. |
| Distance selling threshold (OSS) | EUR 10,000 for total EU distance sales of goods to private consumers per calendar year. |
| VAT number format | PT followed by 9 digits, e.g., PT123456789. |
| Reporting period | Monthly if the previous year's turnover was EUR 650,000 or more; otherwise, quarterly. An annual return is also required. |
| Fiscal representative | Requirements for companies established outside the EU. EU companies can register directly without a representative. |
E-commerce and webshop for Portugal
If you sell goods to Portuguese consumers via your webshop, the general rule is that you must charge Portuguese VAT once your total EU distance sales exceed EUR 10,000 per year. Instead of registering for VAT in each individual EU country, you can use One Stop Shop (OSS) and account for all your EU B2C VAT through a single consolidated return in your home country.
OSS dækker dog ikke alt. Har du varelager i Portugal, eller opbevarer du varer i et Amazon-lager i landet, skal du som hovedregel momsregistreres lokalt uanset OSS. Det gælder også ved import af varer fra lande uden for EU. Sælger du gennem Amazon FBA eller andre markedspladser med lager i Portugal, hjælper vi dig med at få styr på registreringen. Læs mere om Danish e-commerce to the EU, hvis du vil have overblik over de samlede krav.
Regional rates in Madeira and the Azores
Portugal is one of the EU countries where the VAT rate depends on where the supply is deemed to take place. A rate of 23% applies on the Portuguese mainland, whereas lower rates apply in the autonomous regions of Madeira and the Azores to support their island economies. In Madeira, the standard rate is 22%, the intermediate rate is 12%, and the super-reduced rate is 4%. In the Azores, the corresponding rates are 16%, 9%, and 4%. If you trade in goods or services physically within these regions, you must use the correct regional rate on your invoice. This is a common source of error, and we ensure that you apply the correct rate.
B2B and reverse charge
If you sell goods or services to a Portuguese VAT-registered customer and your business is not established in Portugal, the sale will often be subject to reverse charge rules. In this case, you issue an invoice without VAT, and your Portuguese customer accounts for the VAT in their own return. The reverse charge mechanism does not apply when the customer is a private consumer without a VAT number. The rules are detailed and depend on the type of goods and the place of supply; therefore, we always recommend a specific assessment before you issue an invoice.
VAT refund in Portugal
If your company has incurred expenses in Portugal, you can often reclaim the VAT paid. This typically applies to VAT on trade fair expenses, conferences, fuel, and advertising, as well as purchases of goods and services. Obtaining a refund requires proper documentation and adherence to Portuguese deadlines. We handle the entire process and ensure the application is submitted correctly the first time.
Here is how TIMEVAT helps you in Portugal
TIMEVAT is a specialist firm in finance and exports with years of experience in guiding foreign companies safely through international VAT regulations. We speak the language, know the local procedures, and act as your VAT representative before the Portuguese authorities. We serve as your extended arm to the authorities and look after your business as if it were our own.
- Registration – we handle your VAT registration in Portugal from start to finish.
- Filing and Compliance – we handle ongoing VAT and listing filings to ensure deadlines are met.
- VAT Refund – we reclaim the VAT you are entitled to get back.
Are you getting started in Portugal?
Let’s discuss registration, reporting, and OSS so you get off to the right start.
Contact us todayFrequently asked questions about VAT in Portugal
What is the VAT rate in Portugal?
The standard rate on the Portuguese mainland is 23%. There is also an intermediate rate of 13% and a super-reduced rate of 6%. In Madeira, the rates are 22%, 12%, and 4%, and in the Azores, they are 16%, 9%, and 4%.
Is there a registration threshold for foreign companies?
No. Foreign companies without a fixed place of business in Portugal are not subject to a registration threshold and must register for VAT as soon as they carry out a taxable transaction in the country—for example, sales from stock or imports.
Do I need a fiscal representative in Portugal?
Companies established outside the EU must appoint a fiscal representative to report VAT in Portugal. Companies established within the EU can register directly without a representative. TIMEVAT can act as your VAT representative.
When can I use OSS for sales to Portugal?
If you sell goods to private consumers in the EU, you can use One Stop Shop (OSS) when your total EU distance sales exceed EUR 10,000 per year. If, on the other hand, you have storage in Portugal, you typically have to be registered for VAT locally regardless of OSS.
How often do I need to file a VAT return in Portugal?
VAT is reported monthly if your turnover in the previous year was EUR 650,000 or more, and quarterly otherwise. In addition, an annual return must be submitted.
