- Introduction of Automatic VAT Returns: As of July 1, 2025, Portugal has launched an automatic VAT returns system for domestic taxpayers, allowing businesses to submit pre-filled VAT returns to simplify compliance and reduce errors in the filing process.
- How the System Operates: The system generates a provisional VAT return based on transaction data, which businesses can review and adjust before submission. If there are no transactions, the return is automatically filed, and the feature is accessible through the e-fatura portal and other integrated tax tools.
- Eligibility and Exclusions: The automatic VAT return system is available only to Portuguese resident businesses that are not on the cash accounting scheme and ensure proper invoice classification. However, businesses involved in imports, exports, reverse charge transactions, or special VAT schemes will not benefit from this system, and manually registered invoices may also be excluded from automatic returns.
Importance of This Change
This initiative modernizes Portugal’s tax system, aiming to reduce administrative burdens and improve filing accuracy, thereby enhancing overall compliance for businesses.
Source Sovos
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