📌 Initial note
This guide covers general VAT invoicing rules for self-employed workers (TI) and sole traders (ENI), applicable to:
Common services → consulting, design, programming, translation, training, admin support, etc.
Standard goods sales → clothing, books, electronics, simple crafts, office supplies, etc.
👉 Important: there are special VAT regimes not covered here, such as:
Travel agencies (margin scheme – DL 221/85)
Second-hand goods, art, collectors’ items, antiques (margin scheme – DL 199/96)
Tobacco (special regime – DL 346/85)
Fuels (CIVA Article 69)
Financial and real estate transactions (exemptions under CIVA Article 9)
This guide applies only to standard/normal cases.
Step 1 — Your VAT status
A) Exempt regime
CIVA Article 53 (VAT exemption regime):
“Taxable persons whose turnover in the previous calendar year did not exceed €15,000 are exempt from VAT.”
VAT reason code on the invoice: M10
CIVA Article 9 (exemptions for domestic transactions):
Includes, for example:
Education (No. 9)
Healthcare services (No. 1)
Cultural and artistic activities (No. 10)
VAT reason code on the invoice: M07
B) Standard regime
You charge VAT when the transaction is located in Portugal (CIVA Article 6).
You may invoice 0% VAT in cases of exemption or outside the scope / not located in PT (exports, EU, non-EU).
Obligations:
Modelo 300 (Periodic VAT Return / DP)
Recapitulative Statement (DRI / Modelo 349) for intra-Community transactions
Step 2 — Place-of-supply rules (CIVA Article 6)
Before applying any VAT rate, you must determine where the transaction is considered to take place. This defines whether VAT is due in Portugal or in the customer’s country.
Key rules:
B2B services (customer is a taxable person)
→ located in the customer’s country (Article 6(6))
→ typically applies: M40 or M44B2C services (private customer)
→ located in the supplier’s country (Portugal), except for specific exceptions (Article 6(7) onwards)
→ apply the rate of the supplier’s regionSupply of goods
→ location depends on the place of delivery/dispatch (Article 6(1))In-person services, events, real estate, catering, etc.
→ located where they physically occur (Article 6(9))
🇵🇹 Customer in Portugal (Mainland, Azores, Madeira)
Rule: apply the VAT rate of the region where the operation is considered located (CIVA Article 6). VAT rates (2025):
Mainland: 6% / 13% / 23%
Azores: 4% / 9% / 16%
Madeira: 4% / 12% / 22%
Exempt regime
Always 0% VAT — M10 (Article 53) or M07 (Article 9).
Standard regime — Services
B2B (general rule): customer location → apply the customer region’s rate/exemption
B2C (general rule): supplier location → apply your region’s rate/exemption
In-person services (events, real estate, catering): place of performance → apply the rate/exemption of the region where they occur
Standard regime — Goods
Delivery/destination in an Autonomous Region (Azores/Madeira): operation located there → apply that region’s rates (with proof of delivery)
Ex works (picked up on the Mainland): operation located on the Mainland → Mainland rates
Imports cleared through customs in an Autonomous Region: subject to that region’s rates
⚠️ Common mistakes for Portuguese customers
Confusing Article 53 exemption with Article 9 exemptions
Many self-employed workers think writing “VAT 0%” is enough.
But:Article 53 (M10) → turnover-based exemption (≤ €15,000/year).
Article 9 (M07) → activity-based exemption (health, education, culture, etc.) independent of turnover.
Using the wrong code may cause issues during audits.
Applying the wrong regional rate
Portugal has three distinct VAT territories: Mainland, Azores, Madeira.
The correct rate depends on where the operation is located (Article 6), not only the supplier’s address.Missing mandatory wording on the invoice
Even if exempt, you must issue an invoice with the correct statement, e.g.:“VAT — exemption regime, Article 53 of the CIVA”
“VAT — exempt under Article 9 of the CIVA”
🇪🇺 Customer in the European Union — Supplier not using OSS
What is VIES?
VIES is the EU system for validating VAT numbers. For EU B2B reverse-charge transactions, the customer must be registered in VIES and use that VAT number.
To check a customer’s VAT number in VIES, use the EU VAT validation page (VIES). In the form, select the customer’s country under “Member State / Northern Ireland”, enter the VAT number (remove the country prefix letters if included), and click “Verify”.
1) Supplier registered in VIES × Business customer (with VIES) — B2B
Services: 0% VAT — reason: M40 (CIVA Article 6(6))
Goods: 0% VAT — reason: M16 (RITI Article 14)
Applies to an intra-Community supply of goods to a taxable person registered in VIES, with proof of dispatch.Report in: DRI + Modelo 300
2) Supplier registered in VIES × Private customer (no VIES) — B2C
Services: charge Portuguese VAT (rate of supplier’s region)
Goods: same → Portuguese VAT (supplier’s region)
3) Supplier not registered in VIES × Business customer (with VIES) — B2B
Services: 0% VAT — reason: M40 (CIVA Article 6(6))
Goods: you cannot apply 0% VAT (M16) because the supplier is not registered in VIES.
The operation is not treated as an exempt intra-Community supply, so you must charge VAT at your Portuguese region rate.
If you are exempt:
Art. 53 → 0% VAT — M10
Art. 9 → 0% VAT — M07
4) Supplier not in VIES × Private customer (no VIES) — B2C
Services and goods: charge Portuguese VAT (your region).
If exempt: M10 (Art. 53)
If exempt: M07 (Art. 9).
⚠️ Common mistakes for EU customers
Charging 0% VAT in B2C
Being in the EU is not enough. 0% applies mainly to B2B with a valid VIES VAT number.
For B2C, Portuguese VAT applies (or destination VAT via OSS if applicable).Not validating the VAT number in VIES
A VAT number provided by the customer may be invalid. You must validate it and keep proof (screenshot/PDF). Without this, you should not apply M40/M16.Not submitting the DRI (Recapitulative Statement)
When you do EU B2B supplies/services with a valid VAT number, you must submit both Modelo 300 and the DRI.Forgetting OSS
For EU B2C transactions above €10,000/year, Portuguese VAT no longer applies and you must apply the customer country’s VAT. OSS simplifies this.
🇪🇺 Customer in the EU — Supplier using OSS
1) Business customer (valid EU VAT number) — B2B
Services: 0% VAT — M40 (Art.º 6.º, n.º 6 CIVA)
Goods: 0% VAT — M16 (Art.º 14.º RITI), with proof of dispatch + DRI
📌 Note: OSS does not apply to B2B transactions, even if the customer lacks a valid VIES VAT number.
2) Private customer (no VAT number) — B2C
Services: VAT of the customer’s country (e.g., Germany 19%, France 20%) — declared in Portugal via OSS
Goods: VAT of the customer’s country (e.g., Spain 21%, Italy 22%) — declared in Portugal via OSS
📌 Important technical note:
OSS applies only to B2C services located in the customer’s country under CIVA Article 6(11) (e.g., digital services, telecoms, broadcasting).
If you provide in-person services (classes, massages, live events, catering), these are located where they physically occur (Article 6(9)) and cannot be declared via OSS.
📘 Important note
OSS (One Stop Shop) covers intra-EU B2C sales of goods and services and replaces the need to register for VAT in each Member State.
You file in Portugal, but pay VAT at the customer country rate.
From €10,000/year in total EU B2C sales/services, OSS becomes mandatory.
The €10,000 threshold is global across the EU, not per country.
🌎 Customer outside the EU
1) Business customer (non-EU VAT/tax ID) — B2B
Services (consulting, programming, design, etc.):
0% VAT — M40 (CIVA Article 6(6)(a))
Applies when the customer is a taxable person established outside the EU and the general B2B rule applies: place of supply = customer country → not located in Portugal.Reverse charge applies in the customer country if their law requires it.
Goods (export):
0% VAT — M05 (CIVA Article 14):
Applies to goods dispatched/transported outside the EU by the seller or on their behalf.Requires documentary proof of export (e.g., customs export document, CMR, carrier invoice).
⚠️ Important: the Article 14 export exemption (M05) does not apply if the goods are transported out of the EU by the customer (e.g., warehouse pickup). Without proof of export “by the seller or on the seller’s behalf”, the Tax Authority may require Portuguese VAT.
📌 Note:
For services (M40), you must have a reasonable basis that the customer is carrying out an economic activity (taxable person) in the destination country.
Being outside the EU alone does not automatically mean “no Portuguese VAT” — it must follow the territoriality rules in CIVA.
2) Private customer resident outside the EU / final consumer — B2C
Services
General rule (CIVA Article 6(6)):
services are subject to VAT in Portugal because they are supplied by a taxable person established in Portugal to a final consumer.Exception (effective use/exploitation outside Portugal):
If the service is not caught by a specific rule (paras. 7–14) but is effectively used and exploited outside Portugal (e.g., remote consulting by email, a report delivered remotely), it may be treated as outside Portuguese VAT scope:
0% VAT — M40 (Article 6(6), final part)
Specific rules (Article 6(7)–(14))
If the service falls under specific exceptions (events, transport, real estate, etc.), that location rule applies.
If located outside PT under those rules:
0% VAT — M44
⚠️ Attention — digital services ≠ consulting
Personalized consulting (even via Zoom/email) is not automatically a “digital service” for Article 6(11), so it typically does not qualify for M44 on that basis.
Goods (export):
0% VAT — M05 (CIVA Article 14), provided the goods are dispatched/transported outside the EU by the seller or on their behalf, with documentary proof (customs docs, CMR, pro-forma invoice, carrier receipt). Without proof, the supply is not exempt.
📌 Note:
To apply M40 for B2C outside PT based on use/exploitation abroad, you need clear indicators the service will be used outside Portugal.
If you cannot support that, you should charge Portuguese VAT at the normal rate.
3) Online sales (e-commerce) up to €150 — private customer
The IOSS (Import One Stop Shop) regime may apply to distance sales of imported goods into the EU when:
The order value does not exceed €150, and
The customer is a private consumer.
In these cases:
You charge the VAT of the customer’s country at the time of sale;
You declare it through IOSS in Portugal;
The customer receives the parcel without paying additional VAT at customs.
Important:
Only for B2C (no VAT number)
Not applicable to B2B
Only valid up to €150; above that, normal import rules apply (VAT at customs)
4) If you are VAT-exempt as a supplier
If you are TI/ENI under a VAT exemption, you must use the correct reason code even with foreign clients:
Exempt under CIVA Article 53 (turnover exemption): 0% VAT — M10
Exempt under CIVA Article 9 (activity exemption): 0% VAT — M07
📌 Note:
Even with non-EU clients, if you are exempt as the supplier you should use M10 or M07, not the “international” reason codes (M40, M44, M05).
Reduced and intermediate VAT rate tables (2025)
Legal basis: CIVA Article 18 + Annex Lists I and II.
Azores and Madeira apply reduced percentages but the same categories of goods/services (Ofício-Circulado 25045/2024).
Mainland (2025)
Reduced rate 6% (List I):
Essential foodstuffs (bread, milk, rice, fruit, fresh vegetables, olive oil, fresh meat, fresh fish)
Medicines for human use, prosthetics, wheelchairs
Books, newspapers, magazines (except mostly advertising publications)
Passenger transport (train, bus, metro)
Restaurant services (partly — some items may fall under the intermediate rate)
Tickets to museums and cultural performances
Intermediate rate 13% (List II):
Wine, beer, soft drinks, bottled mineral water
Canned fish and meat, sausages/cured meats
Certain prepared foods
Restaurant services (generally)
Electricity and natural gas for domestic consumption
Standard rate 23%: everything else.
Azores (2025)
Reduced: 4%
Intermediate: 9%
Standard: 16%
Same categories as the Mainland, only reduced percentages.
Madeira (2025)
Reduced: 4%
Intermediate: 12%
Standard: 22%
Same categories as the Mainland.
📌 Final note
If you work with food, culture, transport, healthcare or books, always confirm the relevant List I / List II of the CIVA to apply the correct rate.
TI/ENI under exemption (Article 53 / Article 9) do not apply rates, but should know which rates would apply if they move to the standard regime.