In Portugal, Self-Employed Workers (TI) and Sole Proprietors (ENI) are subject to different tax regimes, including VAT.
VAT Exemption for Low Turnover
Income limit: In 2024, the income limit for VAT exemption was €14,500, which increased to €15,000 in 2025.
Who is exempt: If the annual income does not exceed the established limits, TI and ENI may be exempt from VAT. In this case, they should indicate "VAT - exemption regime" on their invoices.
Loss of exemption and transition to the regular VAT regime: If the income exceeds the limit during the year, the taxpayer is required, in the following year, to switch to the regular VAT regime. This means registering as a VAT taxpayer, submitting periodic returns, and being able to deduct VAT on expenses related to the business.
VAT Exemption under Article 9
Article 9 of the VAT Code (CIVA) grants VAT exemption for certain essential services, which can be provided by Self-Employed Workers (TI) and Sole Proprietors (ENI) – individuals. The VAT exemption under Article 9 does not depend on the annual turnover. The main exempt activities include:
Health services: Exemption for services provided by doctors, dentists, psychologists, nurses, and other healthcare professionals.
Education services: Includes private tutoring and educational programs.
Social support services: Assistance for the elderly and people with disabilities.