All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.
Local Insights

Portuguese VAT: Gold-plated invoicing obligations for non-established businesses

Sponsored by
cloister-of-las-duenas-3684449.jpg

Daniel S de Bobos-Radu and Diogo Gonçalves Dinis of Cuatrecasas provide a summary of the new rules impacting invoicing obligations in Portugal.

Despite the alignment with the requirements stemming from Article 226 of Council Directive 2006/112/EC (VAT Directive), the Portuguese government has been changing invoicing obligations with a severe impact on non-established taxable persons.

In this regard, Decree-Law 28/2019, of February 15 2019, brought new mechanisms aimed at fraud-tackling, including broadening the scope of the obligation to use certified invoicing software and the obligation to issue invoices and other tax-relevant documents containing a unique document code and a QR Code. It also transposed Article 219-A of the VAT Directive, clarifying the territorial scope of invoicing obligations.

Below is a summary of the new rules in force.

Certified invoicing software: From January 1 2020, Portuguese taxable persons with a turnover above €50,000 ($53,286) must raise invoices (and other tax-relevant documents such as credit and debit notes) through an invoicing software certified by the local tax authorities. As from July 1 2021, this obligation was extended to non-established taxable persons identified for VAT purposes in Portugal.

Unique Document Code (ATCUD): Taxable persons must include an ATCUD on invoices and other tax-relevant documents issued through their certified invoicing software. This obligation was postponed to January 1 2023.

Series reporting obligation: Taxable persons must communicate electronically to the tax authorities the numeric series used to issue invoices and other tax-relevant documents prior to their use. For each series of documents communicated, the authorities will assign a validation code that must integrate the ATCUD. Alike ATCUD, this obligation was postponed to January 1 2023.

Bidimensional Bar Code (QR Code): A visible QR Code must be placed on the invoices and other tax-relevant documents issued through the certified invoicing software. The QR Code will be generated in accordance with the technical requirements and specifications set out by the tax authorities. This obligation is in force from January 1 2022.

SAF-T (PT): As per the 2022 state budget bill, non-established taxable persons identified for VAT purposes in Portugal are required to submit the SAF-T (PT) file on a monthly basis until the 5th day of the subsequent month. This obligation is expected to go live as soon as the state budget law is gazetted.

This bundle of ancillary obligations is already having a negative impact on foreign businesses, not only because of the technical complexity underlying their implementation, but also because the absence of a turnover threshold for implementation may be leading business to start a cost-benefit analysis, with an evident impact on competition neutrality. Moreover, in terms of proportionality, there is no empirical evidence yet that such measures will be effective in combating fraud and tax evasion.

Be that as it may, this is the right time for companies to reassess the efficiency of their supply chains and, eventually, adapt contractual agreements to benefit from simplification measures such as the VAT quick fixes and the domestic reverse-charge mechanism in lieu of maintaining VAT identification in Portugal.

More from across our site

EY’s plan to separate its auditing and consulting businesses might lessen scrutiny from global regulators, but the brand identity could suffer, say sources.
Multinationals are asking world leaders to put a scale on carbon pricing to tackle climate change at the 48th G7 summit in Germany, from June 26 to 28.
The state secretary told the French press that the country continues to oppose pillar two’s global minimum tax rate following an Ecofin meeting last week.
This week the Biden administration has run into opposition over a proposal for a federal gas tax holiday, while the European Parliament has approved a plan for an EU carbon border mechanism.
Businesses need to improve on data management to ensure tax departments become much more integrated, according to Microsoft’s chief digital officer at a KPMG event.
Businesses must ensure any alternative benchmark rate is included in their TP studies and approved by tax authorities, as Libor for the US ends in exactly a year.
Tax directors warn that a lack of adequate planning for VAT rule changes could leave businesses exposed to regulatory errors and costly fines.
Tax professionals have urged suppliers of goods from Great Britain to Northern Ireland to pause any plans to restructure their supply chains following the NI Protocol Bill.
Tax leaders say communication with peers is important for risk management, especially on how to approach regional authorities.
Advances in compliance tools in international markets and the digitalisation of global tax administrations are increasing in-house demand for technologists.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree