Taxpayers who are under the VAT exemption scheme of Article 53 of the VAT Code, but exceed the maximum limit of 18,750 euros, are required to pay tax, according to the Tax and Customs Authority (AT).
“I am under the VAT exemption scheme of Article 53 and on my next invoice I will exceed the €18,750 turnover threshold, what do I do? If, in the current calendar year, the exemption limit is exceeded by 25%, you are required to charge VAT on the invoice where the 18,750 € (15,000 + 25% x 15,000) is exceeded and to submit a declaration of alterations within 15 working days from that moment“, the AT explains in a post shared on social media.
The tax authority also clarifies the following example:
“A taxpayer under the special exemption regime had performed operations in the national territory totaling a turnover of 18,000 € by the end of August 2025. On September 19, 2025, they are going to issue an invoice, within the legal deadline for its issuance, for the amount of 1,000 €. Adding this amount to the already realized turnover, it is noted that the exemption threshold is exceeded by more than 25% (18,750 €). Thus, you must, upon issuing this invoice, charge the due tax on the transaction and proceed within 15 working days from that date, that is, by October 10, 2025, to submit the declaration of alterations, through the Finance Portal, indicating the volume of turnover achieved up to that date,” the statement reads.
As a result, “you are classified under the normal taxation regime from September 19, 2025, onwards.”
What is VAT?
VAT is the Value Added Tax, which is essentially a tax applied to sales or service provisions in Portugal.
“VAT is paid by the consumer at the time of paying for the goods or services provided. The seller or service provider receives the VAT amount and subsequently pays it to the Tax and Customs Authority,” it is explained on the public services portal gov.pt.
Communicating the Start of Activity
This means “individuals (self-employed workers) or entities (companies) that produce, market, or provide services in Portugal are required to pay taxes, for which they have to submit the declaration of start of activity.”
However, “self-employed individuals are not required to declare the start of activity if they only perform an isolated act (receiving only once during the year concerning the sale of goods or service provision) that does not exceed 25,000 euros,” according to the same portal.
In general, “a self-employed worker or company must submit the declaration of start of activity before commencing the activity.”
“For companies registered with a commercial registry office, the declaration of start of activity must be submitted within a maximum of 15 days after registration at the registry office,” it is further explained.
