October 26, 2021
Portugal proposes changes to VAT law
On 11 October 2021, the Law Proposal for the 2022 State Budget was submitted to the Portuguese National Assembly.
The Law Proposal introduces, for VAT purposes, among others, changes to the deadline for the submission of Value Added Tax (VAT) returns as well as the deadline for the payment of VAT due. It also establishes the suspension of the entry in to force of the single document code (ATCUD) and obligation of invoices’ communication by taxable nonresidents.
This Alert summarizes the key changes under the Law Proposal.
VAT returns and payment of VAT: Harmonization of deadlines and payment in installments
Deadline for the submission of VAT returns
The Law Proposal for the 2022 State Budget contains an amendment to article 41.º of Portuguese VAT Code, providing that the deadlines for the submission of the VAT returns will be due on the same calendar day.
Payment of the VAT assessed by the taxpayer
The harmonization of the tax payment period is also provided for under an amendment to article 27 of the VAT Code.
Complementary tax deferral regime
The Law Proposal for the 2022 State Budget also provides that during the first semester of 2022, the monthly obligation to pay the VAT due (in accordance with article 27 of the VAT Code referred to above) may be made by one of the following:
In the case of the monthly regime, this possibility is applicable to taxpayers who have met the following conditions:
Decree-Law No. 28/2019, of 15 February provides that from 1 January 2020, all invoices and other fiscally relevant documents must contain a bidimensional bar code (QR code) and a single document code (ATCUD)
However, given the current pandemic situation, this deadline has been extended several times.
The Law Proposal for the 2022 State Budget provides for the postponement of said obligation to 2023, being however considered in 2022 as optional for those taxpayers who decide to do so.
Communication of invoices by nonresident entities
Finally, the Law Proposal for the 2022 State Budget also provides that for taxpayers who are, under article 35.º A of the VAT Code, subject to invoicing rules in Portugal (including nonresident entities but registered for VAT purposes in Portugal) must communicate to the Portuguese Tax and Customs Authorities (PTA), all the elements of the invoices issued under the terms of the VAT Code as well as the elements of the documents that enable the verification of goods or provision of services and receipts, by one of the following methods:
The communication of these documents must now be carried out by the 5th day of the month following their issuance. This communication must be made regardless of whether documents have been issued.
VAT taxpayers should work with their local tax professional to:
For additional information with respect to this Alert, please contact the following:
Ernst & Young, S.A., Lisbon