Invoicing and Tax regulation in Portugal
Invoicing Regulation in Portugal
In Portugal, a rigorous invoicing regulation is in place; sales and services transactions require legal invoices. As a business entity, you must produce and issue an invoice for every transaction you enter into, regardless of whether you are dealing with B2B, B2C, or B2G business. Be sure to note that the invoice should contain specific details, including the payer's fiscal number for transactions above €1000. Unauthorized invoices could lead to penalties.
Real-time Reporting / Fiscalization in Portugal
In the realm of real-time reporting and fiscalization, it's important to know that in Portugal, large taxpayers and companies dealing with certain high-risk products must report transaction details to the tax authorities in real time for immediate inspection. Real-time reporting is mandatory and necessitates employing a sophisticated technology system capable of tracking every transaction instantly.
E-invoicing in Portugal
E-invoicing in Portugal is gaining attention and is expected to become obligatory for all B2G transactions from 2020. Public administration vendors will have to issue and send electronic invoices in line with the UBL and ATCUD standards, enabling the Portuguese government to monitor transactions more effectively.
VAT/GST/Tax Compliance in Portugal
Finally, understanding VAT/GST/Tax Compliance is crucial for operating in Portugal. The standard VAT rate is 23%, but reduced rates of 6% and 13% apply to certain goods and services. Specific industries will have their tax rates, and for B2B transactions within the EU, you will not be charged VAT under the reverse charge mechanism. It's crucial to be aware that Portugal operates under a "VAT cash accounting" scheme, where VAT is due when payment is received. The authorities strictly enforce compliance with VAT/GST/tax laws in Portugal.