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New VAT Rules in Portugal: Challenges for Self-Employed Newcomers

  • Starting self-employment in Portugal is now more complex due to VAT changes.
  • Previously, new freelancers had a one-year VAT exemption if turnover was below a certain threshold.
  • Recent changes set the exemption threshold at €15,000, applicable only within Portugal.
  • Only those with recognized tax residence in Portugal qualify for the exemption.
  • Non-residents must issue VAT invoices from the start and miss out on simplified tax treatment.
  • Non-residents have two options: register under the regular VAT regime or apply for an EU-based exemption.
  • New rules increase administrative burdens and tax pressure for newcomers.
  • Reforms may discourage new freelancers and immigrant entrepreneurs in Portugal.
  • Newcomers should understand immediate VAT obligations and residency requirements for exemptions.

Source: inlis.pt

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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