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October 26, 2021

Portugal proposes changes to VAT law

Executive summary

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.

Detailed discussion

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.

  • For monthly VAT returns (taxable person with turnover in the preceding year exceeding €650.000), the proposal establishes that it must be submitted by the 20th day of the 2nd month after the end of return period.

  • For quarterly VAT returns (taxable person with turnover in the preceding year did not exceed €650.000), the proposal establishes that it must be submitted by the 20th of the 2nd month after the end of the quarter that return period relates to.

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.

  • For monthly VAT returns, the payment of the amount of tax due must be performed by the 25th day of the 2nd month following the month to which the operations relate to.

  • For quarterly VAT returns, the payment of the amount of tax due must be made by the 25th day of the 2nd month following the quarter of the calendar year to which the operations are related to.

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:

  • The end of the voluntary payment period

  • In three or six monthly installments, with a value equal or greater than €25, without interest or penalties being applied

In the case of the monthly regime, this possibility is applicable to taxpayers who have met the following conditions:

  • Have obtained in 2020 an annual turnover equal to or less than €50 million and that, cumulatively, declare and demonstrate a decrease of the invoicing communicated through “e-factura.” This decrease should be of at least 10% of the monthly average of the year of 2020 compared to the same period of the previous year.

  • Their main activity is one of the following: accommodations, restaurants and similar venues, or culture.

  • Have started or restarted activity after 1 January 2021.

ATCUD suspension

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:

  • Real-time electronic data transmission, integrated in an electronic invoicing program

  • Electronic data transmission by sending a standardized structured file based on the SAF-T (PT) file

  • Posting directly on the PTA’s website

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.

Next steps

VAT taxpayers should work with their local tax professional to:

  • Review the reporting obligations applicable to the taxpayer and ensure compliance with the reporting and payment obligations.

  • Provide all information, clarifications and support necessary for the correct application of these new measures, namely regarding the possibility and requirements of payment of VAT in installments.

  • Understand the implementation of requirements regarding invoice communication, mandatory as of 1 January 2022.


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

Ernst & Young, S.A., Lisbon


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