Tax rate by region Portugal

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

VAT on SaaS in Portugal: A Breakdown

Portugal adheres to the EU’s Value-Added Tax (VAT) system, which dictates that SaaS (Software-as-a-Service) and other digital services are subject to a 23% VAT rate. This tax system, adopted in 1986, plays a crucial role in enhancing revenue collection and ensuring compliance across EU member states. However, certain categories of educational services may be exempt from VAT, provided they meet specific criteria related to the educational institution or provider.

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Portugal

Portugal adopted the EU VAT system in 1986 to enhance revenue collection and improve compliance.

Official government link: Autoridade Tributária e Aduaneira

23.00%

E-products and services VAT/Sales tax rate

6.00%

Reduced tax rate

Reduced tax rate product categories

E-books have a lower tax rate in Portugal

Exempted product categories

Educational services: Some online courses, e-learning platforms, and educational content might be exempt if they meet specific criteria related to the educational institution or provider.

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

Non-resident companies have to register as soon as goods are being delivered or services are being provided

Online registration possible

Yes

Local representative needed

Yes

Registration procedure

Companies located outside of Portugal who provide taxable digital services there may need to register for VAT with the Portuguese tax authorities (AT). Businesses from non-EU countries must have a tax representative in Portugal to handle this registration.

Alternatively, they can use the Mini One Stop Shop (MOSS) system. MOSS simplifies VAT compliance for businesses providing telecommunications, broadcasting, television, and electronic services to EU consumers where they don’t have an establishment. If a supplier is based outside the EU and not registered for VAT in any member state, they can choose Portugal as their MOSS identification state.

List of digital and electronic services liable for tax

Digital media and entertainment:
E-books, movies, music, images (whether purchased or streamed)
Cloud-based software and services:
SaaS, PaaS, and IaaS
Web-related services:
Websites, hosting, and internet providers
Online marketing:
Online ads and affiliate marketing

Penalties

In Portugal, if you submit your VAT return late or fail to submit it altogether, you could face a penalty ranging from €300 to €3,750.

Additionally, if you delay or neglect to pay the VAT due, you could be penalized with a fine of up to 30% to 100% of the unpaid tax amount.

Registration threshold

No threshold, non-resident companies must register for VAT

Filing interval

Monthly/Quarterly

Filing deadline

20th day of the second month following the reporting period.

E-invoicing requirements

Yes

Record keeping

The following documents must be kept for 10 years:

Here are some of the key tax documents you should retain:

Invoices: Both sales invoices you issue and purchase invoices you receive.
Accounting records: General ledger, subsidiary ledgers, cash books, bank statements, etc.
Tax returns: Copies of filed tax returns and proof of payment.
Import/export documents: Customs declarations, shipping documents, etc.
Contracts and agreements: Any contracts or agreements that have tax implications.
Correspondence: Any correspondence with the tax authorities.

How-To Guides: Portuguese SaaS VAT

Step: 1 Threshold

Effective July 1, 2003, Portugal requires non-EU vendors (including online platforms) of digital services to
consumers (B2C) in Portugal to register for and collect VAT, regardless of the sales amount. The
obligation was expanded to EU-established digital services providers effective January 1, 2015.

Effective January 1, 2019, Portugal applies a VAT registration threshold of EUR 10,000 for EU established digital services providers. The threshold does not apply to non-EU businesses.

• Non-Resident: €0 (Registration mandatory from the first B2C sale).
• EU-Based: €10,000 (Cross-border EU threshold for digital services).

Step: 2 Business Registration

Business registration is handled by the Autoridade Tributária e Aduaneira (AT). Non-EU suppliers may:
Register directly in Portugal with the AT (often requiring a fiscal representative), or use the Non-Union OSS to avoid local registration.
EU suppliers typically use the Union OSS in their home Member State.

Step: 3 TIN/VAT Number

NIF (Número de Identificação Fiscal) is issued by the Autoridade Tributária e Aduaneira (AT).

Step: 1 Standard VAT Rate

The standard VAT rate in Portugal is 23%

Step: 2 VAT Formula

To calculate your tax amount, use the following formula:

Tax = Net Price x 0.23

Step: 3 Reverse Charge (B2B)

It applies to all cross-border B2B SaaS sales. The Portuguese business buyer is responsible for accounting for VAT, so the seller does not charge VAT; reverse charge applies.

Step: 1 Selling B2C

Must charge 23% VAT (Mainland) unless using the OSS for EU-wide sales. Location is determined by the customer’s IP address, billing address, or bank country.

Step: 2 Selling B2B

Do not charge VAT if the buyer provides a valid VAT ID. Use the “Reverse Charge” mention on the invoice.

Step: 3 Invoice Requirements

Invoices or transaction records must include key details such as:

• Supplier/Buyer Name & Address
• Supplier VAT ID (prefixed with PT)
• Buyer VAT ID (for B2B)
• Unique Sequential Number
• Date of Issue
• Description of SaaS/Services
• Taxable Amount & Rate
• QR Code (Mandatory)
• ATCUD code (Unique doc code)
• Digital Signature: Required for PDFs from 2026/2027.

Step: 1 Filing Interval

Taxes should be filled:

• Monthly (Turnover > €650k)
• Quarterly (Turnover < €650k).

Step: 2 Filing Deadline

Taxes should be filed by the 20th of the second month following the period, and the payment should be made by the 25th of the same month.
SAF-T(PT): Invoice data must be submitted by the 5th of the following month.

Step: 3 Submission

Taxes should be filed via the Portal das Finanças e-filing portal.

Step: 4 Record Keeping

Records should be kept for at least 10 years (must be stored electronically and be accessible for audit).

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating VAT registration and fiscal representation in Portugal can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

FAQ

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