Portugal’s Tax Authority (AT) has published Circular Letter No. 25120 of July 28, 2026, which sets out how taxable persons correct invoices and regularize VAT. The letter applies to every VAT taxable person issuing invoices in Portugal. It replaces Circular Letter No. 33129/1993 of April 2, 1993, and any earlier guidance that conflicts with it.
According to the new guidance, credit notes must be limited to changing the elements that need correcting, and the AT does not accept them as a way to cancel an invoice.
A credit note is not admissible for formal errors that do not affect the taxable amount or the VAT charged, such as errors in the taxpayer identification number (NIF), the address, other identification details of the parties, or the description of goods or services; and it is also not admissible when the transaction never took place.
In these cases, the supplier:
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Annuls the incorrect invoice in its invoicing system;
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Then issues a corrected invoice stating the date the goods were made available or the services were completed, which preserves the VAT chargeability date.
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For formal errors, no VAT regularization or replacement VAT return is needed, even when the return for the period is already filed.
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When the transaction never took place, a replacement VAT return is needed only if the annulment happens after the return for that period is filed.
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Where the invoice was already communicated to the AT, the supplier also corrects that communication, following the AT guidance on the Finance Portal.
When the VAT amount is wrong, the letter prescribes a different route:
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If the supplier charged more VAT than due, the supplier issues a credit note for the full amount of VAT to be corrected.
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The supplier recovers the VAT in the return for the period of the credit note, provided it holds proof that the customer was informed of the correction or was refunded.
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The customer corrects any undue deduction and, where the reverse charge applied, self-assesses the VAT through replacement returns.
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If the supplier charged less VAT than due, the supplier issues a debit note for the missing VAT.
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The supplier files replacement returns for the period when the VAT originally became chargeable.
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The customer reverses any undue self-assessment and, if entitled to deduct, deducts the VAT in the return for the period when it receives the debit note.
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The letter allows a transition period for VAT-only corrections:
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Until December 31, 2026, the AT exceptionally accepts a credit note that cancels the whole transaction, followed by a new invoice that references the corrected invoice and the original supply date.
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From January 1, 2027, the expected route is a credit or debit note for the VAT amount only. If a full credit note and new invoice are used instead, the supplier and the customer both file replacement VAT returns for the period of the original transaction.
The letter contains no transitional provision for the formal-error guidance. As administrative guidance, it therefore reflects the AT’s interpretation from its publication on 28 July 2026.
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