Amendments to Portuguese VAT legislation expand the scope of the existing certified invoicing software requirement to non-resident companies.
Scope of Certified Software Requirement Extended to Foreign Companies
Under the current law, Portuguese companies are required to use invoicing software certified by the Portuguese tax authorities, in respect of their local Portuguese sales.
As of 1st July 2019, this obligation will be extended to non-resident companies. A non-resident company will have to comply once it meets any of the following conditions:
- Its local Portuguese sales exceed a specified threshold:
- For the 2018 calendar year, the threshold is set at EUR 75,000, in which case the company must comply from 1st July 2019;
- For the 2019 calendar year, the threshold is set at EUR 50,000, in which case the company must comply from 1st January 2020;
- The company is already using invoicing software (not including electronic terminals, pre-printed documents or similar); or
- The company is either required to have organised accounts (financial statements) or has opted for this system, in accordance with the International accounting rules (IFRS and IAS).
By 30th June 2019, companies impacted by the invoicing software obligation must notify the tax authorities of:
- the location of their establishments where their invoices and other tax documents are issued:
- the equipment used to process these documents, this equipment’s software certificate number; and
- the identity of the software suppliers.
As of 1st January 2020, new rules will be introduced requiring invoices and other related documents to carry both a unique identifying number and a QR code. These will be assigned by the tax authorities with the view to protect against VAT fraud and evasion.
Companies that fail to comply with these new requirements may be subject to penalties as follows:
- The lack of use of certified software shall be punished with a fine from €1,500 to €18,750.
- The sale or use of software or any other electronic invoicing equipment that do not comply with the requirements shall be punished with a fine between € 1,500 and €8,750.
There has been no extension to the requirement to submit Standard Audit Files for Tax (SAF-T) declarations in Portugal – they currently only have to be submitted by businesses that are established in Portugal.
If you believe these developments impact your business and would like further advice on your next steps, please do get in touch.