Since 1 July 2025, Portugal has implemented automatic VAT returns for domestic taxpayers. This new feature, aimed at easing the tax filing process for domestic businesses, will allow them to submit pre-filled VAT returns, simplifying compliance and minimizing the risk of errors.
How It Works:
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Provisional VAT Return: PTA generates a draft return based on available transaction data.
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Review & Submit: Businesses review, adjust if necessary, and submit the return.
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No Transactions: If no transactions occurred, the return is automatically submitted.
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e-Fatura Portal Integration: This new feature will be available via the e-fatura portal and other integrated tax tools.
Who Is Affected by These Changes?
The automatic VAT returns system will be available exclusively to Portuguese resident businesses that meet the following criteria:
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Business Residency: The business must be established and resident in Portugal.
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No Cash Accounting Scheme: Businesses under the cash accounting scheme (Decree-Law No. 71/2013) are not eligible.
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Correct Invoice Classification: Businesses must ensure that invoices and credit notes received are properly classified in the e-fatura system.
However, not all businesses will benefit from this system in every reporting period. Businesses that meet the above conditions may still be excluded from the automatic returns if they:
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Engage in imports or exports.
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Handle reverse charge transactions.
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Operate under special VAT schemes.
Additionally, invoices and credit notes that are manually registered in e-fatura by the recipient, but not previously communicated by the issuer, will not be included in the automatic VAT return for deduction purposes.
This new feature aims to modernize Portugal’s tax system, reduce administrative costs and improve accuracy, making compliance easier for businesses.
