Portugal - Obligation to use certified software for non-established companies as of 2021

The Decree-Law No. 28/2019 of February 15 ("DL 28/2019") has introduced two significant changes in the Portuguese rules concerning invoicing which are applicable to VAT registered, non- established companies.

Firstly, DL 28/2019 added a new article to the Portuguese VAT Code, transposing article 219-A of the VAT Directive, clarifying that the issuance of an invoice for a taxable supply is subject to the rules laid down in the Portuguese VAT Code when the supply is deemed to be made in Portugal, unless the supplier does not have its head office, fixed establishment or domicile in Portuguese territory and the person liable for the payment of VAT is the recipient in Portugal (except where self-billing applies).

This amounts to say that whenever a VAT registered company assesses Portuguese VAT on an invoice (i.e. the reverse charge mechanism is not applied), the supplier will be liable for the issuance of the invoice in compliance with Portuguese invoicing rules. This rule is already fully applicable at the current date.

This is particularly relevant since the second significant change is that DL 28/2019 also determined that, as of 1 January 2021, the obligation to issue invoices through certified invoicing software is extended to non-established companies that perform taxable transactions to which Portuguese invoicing rules apply and that meet one of the following conditions:

(i) Turnover in Portugal exceeding € 50,000;
(ii) Already use invoicing software; or
(iii) Obliged to have, or opted for, organized accounting.

Bearing the above in mind, VAT registered companies will have 3 options to comply with DL 28/2019:

(a) Apply the reverse charge mechanism or self-billing to all their transactions where the acquirer is established in Portugal;

(b) Adopt one of the invoicing programs which have already been certified by the PTA (available here);

(c) Have the invoicing program which is currently used be certified by the PTA.

Kindly note that if for companies which intend to use one of the programs already certified but in a more recent version, the PTA does not require that every new version of a software is certified as long as the new versions only contain improvements. Conversely, new versions of a certified program that are customized to a specific business or activity are subject to a new separate certification.

The above information was kindly provided by Conceição Gamito from Veira de Almedia (Portugal). If you have any questions or need any clarifications, please contact Conceição at: CRG@vda.pt.

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Disclaimer:  The information contained in the present page is general and does not constitute legal advice. Before taking any decision or action on the above information you should take the appropriate professional advice.