VAT Regimes for Self-Employed Workers (TI) and Sole Proprietors (ENI)

In Portugal, Self-Employed Workers (TI) and Sole Proprietors (ENI) are subject to different tax regimes, including VAT.

VAT Exemption for Low Turnover

1. Income limit: In 2024, the income limit for VAT exemption was 14,500€, which increased to 15,000€ in 2025.

2. 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.

3. 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.