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May 26, 2021

Portugal clarifies VAT rules related to nonresident taxable persons

Executive summary

On 27 April 2021, the Portuguese Tax Authorities published Administrative Ordinance nº. 30235, to clarify the rights and obligations, for Value Added Tax (VAT) purposes, of nonresident taxable persons performing taxable operations located within the Portuguese territory.

It is important to emphasize that the instructions identified within the aforementioned Ordinance took effect as of 27 April. However, the guidelines under previous ordinances, supporting the current administrative instructions now published must also be complied with.

This Alert summarizes the key clarifications.

Detailed discussion

Nonresident VAT taxable entities

Obligation to register and appoint a fiscal representative

Taxable persons carrying out taxable operations in Portugal, except when they are not subject to VAT, due to the reverse charge rules as set forth under Article 2 (1) (e), (g) or (h) of the Portuguese VAT Code, are required to register for VAT purposes in Portugal. This obligation requires an application for a Portuguese VAT number.

Under Article 30 of the Portuguese VAT Code, nonresident taxpayers without a head office, permanent establishment or domicile in another European Union (EU) Member State, which carry out taxable operations in the territory, are required to appoint a fiscal representative in Portugal. However, in the remaining cases this requirement has an optional nature.

Additionally, it should be highlighted that taxable operations performed by a nonresident VAT taxable entity, without a fiscal representative in Portugal but with a Portuguese VAT registration, are subject to the general obligations of the Portuguese VAT Code, including invoicing requirements, VAT payment obligations and the filing of the periodic VAT returns, as set forth under Article 41 of the Portuguese VAT Code.

In light of the above, nonresident VAT taxable entities who only carry out operations subject to the reverse charge mechanism further to the domestic rules set forth in Article 2 (1) (e), (g) and (h) of the Portuguese VAT Code, should not have a VAT registration within the national territory.

Non-application of the invoicing requirements1 to nonresident VAT taxable entities

When the obligation to assess the VAT falls upon the acquirer of the goods or services, through the application of the reverse charge rules, the issuance of the invoices by nonresident VAT taxable entities shall not be subject to the rules set forth under the VAT Code, in accordance with Article 35-A (3) of the Portuguese VAT Code.

Notwithstanding the above, invoices subject to the provision of Article 36 (11) of the aforementioned VAT Code (self-billing procedure) raised by Portuguese resident or established acquirers for operations carried out herein are subject to the rules set forth within the Portuguese VAT Code.

Right to VAT deduction and VAT refund for nonresident taxable persons

Nonresident taxpayers may request a refund of the VAT levied on operations carried out in Portugal, with certain exceptions.

Also, VAT taxable entities established in another EU Member State, who do not have their head office, permanent establishment or domicile in Portugal and who have not performed any taxable operations in Portugal during same period, are also entitled to a refund of the VAT effectively incurred within the national territory, with the exception of the following:

  • Rendering of transport and ancillary services, VAT exempted under Article 13 (1) (f) of the Portuguese VAT Code

  • Rendering of transport services and ancillary services, VAT exempted under the Articles 14 and 15 of the Portuguese VAT Code

  • Supply of goods and rendering of services for which the acquirer is liable to self-assess and pay the VAT due

  • Triangular operations, under the conditions set forth under the Article 15 (2) of the VAT Regime on Intra-Community Transactions (RITI), where the tax is due by the acquirer

VAT taxable entities established outside of the EU are also entitled to a VAT refund, under the conditions mentioned above, provided there is reciprocity treatment by the States where they are established. For this purpose, they must appoint a Portuguese fiscal representative. In this regard, it should be noted that the latter is appointed merely for the purposes of the VAT refund regime for nonresidents and this implies the non-existence of a VAT registration in Portugal.

Reverse charge

The reverse charge rules transfer the VAT assessment and payment to the sphere of the acquirer. By doing so, this regime eliminates the obligation to register for VAT purposes in Portugal for nonresident taxpayers who only carry out operations subject to the reverse charge mechanism and rules provided under Article 2 (1) (e), (g) or (h) of the Portuguese VAT Code.

Article 2 (1) (g)

This rule transfers the obligation of assessment and payment of the VAT due to the taxable person who has its head office, permanent establishment or domicile in the national territory or, that has appointed a fiscal representative herein, under the terms of article 30 of the Portuguese VAT Code, when acquiring goods or services from a nonresident VAT taxable entity which has its head office, permanent establishment or domicile in another EU Member State, and which does not have a fiscal representative in Portugal.

In this context, it is important to highlight that, the nonresident supplier of goods or renderer of services that has a fiscal representative in Portugal is required to communicate this fact to the acquirer, prior to the completion of the operations. If there is no such communication, the acquirer becomes liable for the payment of the VAT herein due.

The correct way to proceed with such communication was not detailed by the Portuguese Tax and Customs Authorities in the current Administrative Ordinance. 

Article 2 (1) (e) and (h)

In what concerns to these provisions, due to the fact that they do not provide, as a condition for their application, the non-appointment of a fiscal representative under the terms of Article 30 of the Portuguese VAT Code, the reverse charge rule occurs whenever the supplier of the goods or the services provider is a nonresident taxpayer.

Scope of the taxable person’s concept for purposes of the reverse charge rules’ applicability

The reverse charge is applicable in the following cases:

  • The State and other legal entities, which are or should be registered as per article 25 of the RITI, under the derogation regime of taxation at the EU Member State of destination of the goods

  • The State and other legal entities when acquiring gas, electricity and heat or cooling energy from nonresident VAT taxable entities

  • Natural or legal persons who exclusively perform operations that are exempt under the terms of Article 9 of the Portuguese VAT Code, as well as VAT taxable entities who fall under any of the special schemes laid down in the Portuguese VAT Code (exemption and small retailers).


For additional information with respect to this Alert, please contact the following:

Ernst & Young, S.A., Lisbon



  1. For further information on VAT invoices issued by nonresidents in Portugal, see EY Global Tax Alert, Portugal: Nonresidents must use authorized software to issue VAT invoices from 1 July 2021, dated 27 April 2021.

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


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