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Understanding how VAT applies to non-resident freelancers providing services to clients in Portugal is essential for proper tax compliance. Whether you offer digital services, consultancy, design, marketing, IT support or professional work from abroad, the place of taxation determines whether you must charge VAT, register for a Portuguese tax number (NIF), or appoint a tax representative.
The standard VAT exemption threshold is now €15,000 in annual turnover.
• For Residents: If your estimated annual income is below this, you can register under the Regime de Isenção (Exemption Regime). You don't charge VAT, but you also cannot deduct VAT on your business expenses.
• The "Instant VAT" Trap: In 2026, if you cross the €15,000 mark, the exemption ends immediately.
• If you exceed it by less than 25% (€15,001 – €18,750): You must transition to the normal VAT regime in January of the following year.
• If you exceed €18,750: You must start charging VAT on the very next invoice that pushes you over that limit. You have 15 days to file a "Declaration of Alteration" (Declaração de Alteração de Atividade).
A critical update for 2026 is that the Article 53 exemption is generally no longer available to non-residents.
• If you are registered as a freelancer in Portugal but do not have a recognized tax residence there, you are required to operate under the Normal VAT Regime from your very first Euro of income.
• This means you must issue VAT invoices immediately and file periodic VAT returns (usually quarterly).
Freelancers working with international clients follow specific rules that often result in "zero VAT" on the invoice, even if you are in the Normal Regime:
• B2B (Business to Business): If your client is a company in the EU (with a valid VIES number) or outside the EU, you apply the Reverse Charge mechanism (Autoliquidação). You charge 0% VAT, and the client handles the tax in their own country.
• B2C (Business to Consumer): If you provide services to private individuals abroad, you generally must charge Portuguese VAT (23%) unless you are selling "digital services" and use the OSS (One Stop Shop) for EU consumers.
Most freelancers fall under the Quarterly Reporting cycle.
• Deadlines: You must submit your VAT return by the 20th of the second month following the quarter (e.g., Q1 Jan–Mar is due by May 20th).
• Payment: Any VAT collected must be paid to the state by the 25th of that same month.
• Zero Returns: Even if you had €0 in earnings for a quarter, you must file a "null" return to avoid automatic fines.
Portugal uses the Recibos Verdes (Green Receipts) system.
• Portal das Finanças: Most freelancers issue invoices directly through the government portal. This automatically handles the QR Code and ATCUD requirements.
• Certified Software: If your annual turnover exceeds €50,000, you are no longer allowed to use the basic portal receipts and must use certified private invoicing software.
Navigating VAT rules in Portugal can be challenging, especially with the new 2026 changes affecting both resident and non-resident freelancers. At E-Golden, we provide tailored support to help you stay compliant and avoid costly mistakes. Our team assists with VAT registration, invoicing requirements, quarterly VAT returns, international client rules (B2B and B2C), and ongoing tax compliance.
Whether you are working remotely, operating as a non-resident, or managing clients across multiple countries, we ensure your activity follows Portuguese tax law safely and efficiently.
If you want clarity and peace of mind, our specialists are here to guide you through every step.
