Portugal: Tax authority clarifies VAT filing simplification measures
On May 19, Portugal’s Tax and Customs Authority released Circular No. 25069, offering guidance on the VAT return simplification measures set out in Decree-Law No. 49/2025, which took effect on July 1.
Key clarifications in the circular:
- Flexibility in filing frequency: Taxpayers who previously opted into the monthly VAT return regime are no longer required to maintain this status for a minimum of three years.
- No agency-initiated changes: The tax authority will no longer initiate changes to a taxpayer’s VAT filing frequency, except in specific situations outlined by law.
- Turnover threshold for monthly filing: Taxpayers with actual turnover of €650,000 (approximately USD 732,773) or more in 2025 must remain on the monthly VAT filing regime throughout 2026 and cannot change their filing frequency.
- Declaration of changes required: Quarterly filers exceeding the €650,000 turnover threshold in 2025 must submit a declaration of changes in January 2026 to transition to monthly filing, effective from January 1, 2026.
The circular provides additional administrative clarity on applying the updated VAT return rules based on taxpayer turnover.
Source: portaldasfinancas.gov.pt
