VAT


VAT - Value Added Tax - is a consumption tax charged on most business transactions in Portugal. It is levied on the sale of goods and services in each stage of the economic cycle from its production to the final consumer.

Each VAT-registered, individual or company, delivers to the Portuguese Inland Revenue the VAT charged on the goods and services provided and is able to reclaim the VAT paid on the purchases (except in some circunstances such as entertainment, transportation, drinks & tobacco, etc).

VAT Rates Portugal - Main Land
Azores & Madeira
Normal Rate (a)
23% 22%
Intermediate Rate (b)
13% 12%
Reduced rate (c)
6% 5%

 

(a) General of goods and services.

(b) Alternative energy sources machinery as well as agriculture machinery, foods and beverages. Cinema entertainment. Transport of people, etc

(c) Hotel accomodation and essential goods, such as cereals, bread, water, meat, fish, pharmaceutical products, etc. Contruction /reconstruction, improvement or maintenenance of buildings under the scope of special regimes of tax and financial support.

 


Main VAT Exemptions

  • Transmission and lease of immovable property - except in some circunstances when requested by the buyer;
  • Rental income;
  • Medical and sanitary services;
  • Financial Operations;
  • Insurance and re-insurance operations;
  • Educational and professional training;
  • Agricultural activities.