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Indirect Tax News from Portugal

By February 20, 2015July 10th, 2021No Comments

With effect as of January 1, 2015, the place of supply of telecommunications services, broadcasting services and electronically supplied services (hereinafter jointly or individually referred to as “digital services” or “digital service”), supplied by…

 

Telecommunications services, broadcasting services and electronic services

   1. Amendments to the Portuguese VAT Code

With effect as of January 1, 2015, the place of supply of telecommunications services, broadcasting services and electronically supplied services (hereinafter jointly or individually referred to as “digital services” or “digital service”), supplied by a supplier established in the EU to a customer established in another EU state, is the place where the customer is established or has its residence, whether the customer is a taxable person or a final consumer. This measure, established in article 5 of Directive 2008/8/CE, was transposed into the Portuguese VAT Code by Decree Law 158/2014 of 24 October.

The same Decree Law also approves the Mini One Stop Shop (MOSS), which applies both to taxable persons not established in the European Union and to EU taxable persons not established in the EU Member State of consumption, where these taxable persons supply digital services to non-taxable persons established or domiciled in the European Union.

The MOSS is optional and allows taxable persons to avoid registering, submitting VAT returns and paying VAT in each Member State in which they supply digital services to non-taxable persons established or domiciled in the European Union.

Under this scheme, a taxable person who opts to register for the MOSS in Portugal (as Member State of identification) will electronically submit quarterly MOSS VAT returns detailing supplies of digital services to other Member States (Member States of consumption), along with the payment of the VAT due.

Registration procedures are available in Portugal since October 25, 2014, in the Portuguese Tax and Customs Authority’s website, at https://m1ss.portaldasfinancas.gov.pt

Although digital services were removed from the list in article 6(11) of the Portuguese VAT Code, (which excluded digital services from the territorial scope of Portuguese VAT when the acquirer of the service is a person established or with a domicile outside the European community), they are still outside the territorial scope of Portuguese VAT, though subject to effective use and enjoyment rules.

In this regard, since January 1, 2015, the supply of digital services by a taxable person established or domiciled in Portuguese territory to non-EU customers is deemed to be in Portuguese territory, provided the effective use and enjoyment of these services takes place within Portuguese territory (article 6(12)(d) of the Portuguese VAT Code – Section (d) of number (12) of article 6 was added by Decree Law 158/2014 of 24 October, which has transposed article 5 of Directive 2008/8/CE to the Portuguese VAT Code).

For this purpose, effective use and enjoyment is deemed to take place in Portuguese territory where the physical presence of the direct recipient of a digital service is needed for the service to be supplied to him.

This is deemed to be the case where the supplier provides those services at a location such as a telephone box, a telephone kiosk, a Wi-Fi hot spot, an Internet café, a restaurant, a hotel lobby or a similar location (article 6(14) of the Portuguese VAT Code – number (14) of article 6 was added by Decree Law 158/2014 of 24 October, which has transposed article 5 of Directive 2008/8/CE to the Portuguese VAT Code in line with article 24a of Regulation 282/2011, as amended by Regulation 1042/2013).

Also for this purpose, the non-EU customer is deemed to be established or domiciled in Portuguese territory where the digital service is provided (a) through a fixed landline installed in Portuguese territory; (b) through a mobile network where Portugal is the country identified by the mobile country code of the SIM card when receiving the service; or (c) through a decoder or similar device or a viewing card (when a fixed landline is not used), provided the decoder or similar device is located in Portuguese territory or, if that place is not known, in the place to which the viewing card is sent with a view to being used in Portuguese territory (article 6(15) of the Portuguese VAT Code – number (15) of article 6 was added by Decree Law 158/2014 of 24 October, which has transposed article 5 of Directive 2008/8/CE to the Portuguese VAT Code in line with article 24b of Regulation 282/2011, as amended by Regulation 1042/2013).

   2. Portuguese Tax and Customs Authority Circulars

The Portuguese Tax and Customs Authority has published the following Circulars:

 

Conceição Gamito and Catarina Belim
Vieira de Almeida & Associados