Executive summary

Ordinance No. 298/2026/1, published on 16 July 2026, introduces new forms for the Value-Added Tax (VAT) Return, Annex R and the annexes relating to VAT adjustments reported in fields 40 and 41.

These changes go beyond merely aligning the VAT Return with recent legislative developments. Rather, they significantly enhance VAT reporting requirements, introducing additional levels of detail and reinforcing the quality, accuracy and transparency of information disclosed by taxable persons.

The amendments aim to:

• Improve the structure and usability of the VAT Return
• Provide greater detail in the reported information
• Implement mechanisms for the automatic pre-population of the taxable amount and VAT due for certain transactions
• Ensure the proper processing of prior authorization requests submitted by taxable persons (i.e., purchasers that have regularized the relevant debts)
• Reinforce controls over VAT adjustments
• Adapt the VAT Return to recent legislative changes, including the VAT group regime and new adjustment rules

Key changes

The main changes introduced by Ordinance No. 298/2026/1 are summarized below, across two distinct phases.

Phase 1 — taxable periods starting from 1 July 2026

VAT group regime

Box 01 of the VAT Return will now include a specific selectable field to identify the exercise of the option for the VAT group regime, introduced by Law No. 62/2025 of 27 October 2025 (see EY Global Tax Alert, Portugal introduces VAT group regime, dated 29 October 2025).

VAT adjustments relating to application of reduced VAT rate under point 2.42 of List I annexed to the Portuguese VAT Code

The Ordinance sets out the reporting mechanism for VAT adjustments associated with applying the reduced rate to transactions covered by point 2.42 of List I of the Portuguese VAT Code (applicable to specific construction or renovation works). For this purpose, the annexes to fields 40 and 41 will include specific fields for reporting these adjustments, allowing, as applicable, adjustments in favor of the taxable person or in favor of the State to be reflected, along with indication of the respective taxable amount and VAT adjusted by taxable period.

Phase 2 — taxable periods starting from 1 July 2027

E-Taxfree

New fields are added to Box 06 for reporting supplies of goods carried out under the e-Taxfree regime with VAT charged. (E-Taxfree is Portugal's digital VAT refund system for tourists from outside the European Union (EU), allowing eligible purchases to be exempt from VAT and refunded when leaving the EU.)

Breakdown of deductible VAT relating to "Other goods and services"

Field 24 of Box 06 is replaced by fields 27, 28 and 29, so deductible VAT relating to other goods and services will now be reported by VAT rate.

Acquisition of electricity from self-consumers who install renewable generation units and sell excess back to electrical supplier, and other reverse-charge transactions

Box 06-A will include new fields for the separate reporting of acquisitions of electricity from self-consumers and other transactions subject to the reverse-charge mechanism.

Margin schemes

A new section is introduced in Box 06A for reporting transactions covered by special taxation schemes based on the margin (i.e., the regime applicable to liquid fuel resellers, travel agencies and tour operators, and sellers of second-hand goods, works of art, collectors' items and antiques).

New detailed boxes for output transactions

The new Box 06B is intended for detailed reporting, by rate, of VAT self-assessment on internal and external deemed supplies, output transactions excluded from the concept of turnover and transactions under the margin scheme.

The new Box 06C is intended to identify output transactions included in fields 1, 5 and 3 that were documented by means other than an invoice (e.g., event tickets).

The new Box 06D is intended for detailed reporting of transactions indicated in field 8 of Box 06 (i.e., exempt or nontaxable transactions that grant the right to deduct VAT).

Changes to the annexes to fields 40 and 41

The reference, in both annexes, to the adjustments provided for in Article 78(6) of the Portuguese VAT Code — relating to material, calculation, recording or transposition errors in VAT Returns — is removed.

Box 1-H of the annex to field 40 is created for reporting adjustments in favor of the taxable person in cases involving the full or partial recovery of doubtful or bad debts in which the Tax Authority has approved a prior authorization request submitted by the taxable purchaser of the debtor taxable persons covered by Article 78-C(3) of the Portuguese VAT Code.

New specific fields are introduced in both annexes for (1) adjustments arising from an error of law and (2) adjustments relating to the e-Taxfree regime.

Implications

These new changes are expected to require a review of internal VAT reporting processes, particularly in relation to systems configuration, data extraction, transaction classification and preparation of the information required to complete the new reporting fields and boxes.

Affected taxpayers should consider doing the following, depending upon their particular circumstances:

• Mapping the transactions currently reported in the VAT Return and identifying the applicable new fields
• Reviewing the configuration of invoicing, accounting and reporting systems to ensure the accurate extraction of information
• Updating internal procedures and reviewing controls for VAT Returns and related annexes
• Delivering internal training to the teams responsible for VAT compliance, particularly in relation to the new reporting boxes and fields