Portugal – New interpretations of the application of the domestic VAT reverse charge mechanism

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Updated:

In our previous news item dated 13 July 2020, we informed you that the reverse charge mechanism provided for in Article 2 1°G of the Portuguese VAT Code was applicable:

  • Where the seller is non-resident and has not appointed a responsible tax representative;
  • Even when the non-resident seller is identified for VAT purposes in Portugal;
  • Where the purchaser is a taxable person identified for VAT purposes in Portugal.

On 27 April 2021, the Portuguese tax authorities issued an order to clarify that the reverse charge mechanism only applies where the acquirer is either a company established in Portugal or a taxable person not established but having appointed a responsible tax representative. This partly changes the guidelines of previous interpretations.

For more information, please contact us.

Source: portaldasfinancas.gov.pt (pdf in Portuguese)

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