Reverse Charge & “Call Off Stock” in Portugal

Reverse charge mechanisms apply to certain domestic supplies of goods and services, which means that the seller invoices sales without including VAT, and the purchaser is liable to settle the transaction, which requires that they must report both output and input VAT on their purchase invoices.

Read more below on the reverse charge application in Portugal as well as all about Portuguese “Call Off Stock”.


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VAT Reverse Charge in Portugal

Local Reverse charge

Domestic supplies of goods subject to reverse charge include portable computers, mobile phones, game consoles, and metal scrap, among other things. While supplies of services include, for example, construction services provided by subcontractors and the sale of emission allowances, services are also provided by the government.

Also subject to a reverse charge are supplies of goods made by a foreign taxpayer to a Portuguese taxpayer for whom the foreign taxpayer does not have a business establishment or a fixed establishment in Portugal.

As a result of such transactions, foreign taxpayers are exempt from registering for VAT in Portugal.

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A Reverse Charge for non-established companies in Portugal 

VAT on domestic supplies of goods made by non-established companies in Portugal (companies that do not have a seat or a fixed place of business in Portugal and are not VAT registered in Portugal) to established companies in Portugal must be settled by those Portuguese companies (purchasers). This means that a foreign entity that is not registered for VAT in Portugal should not charge VAT on domestic supplies of goods to Portuguese businesses. VAT should be settled on a reverse charge basis by purchasers. 


In the case of service provision, the reverse charge mechanism applies in cases where services are provided by non-established companies in Portugal (that do not have a seat or a fixed place of business in Portugal) to a purchaser registered for VAT purposes in Portugal, regardless of whether the foreign service provider is registered for VAT purposes in Portugal. The preceding rule does not apply to services relating to specific real estate for which the supplier is VAT registered in Portugal. 

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Portugal – “Call off stock”

A “call-off stock” situation occurs when products owned by a non-resident supplier are dispatched to be stored in the customer’s nation, typically at the customer’s facilities. When products are required, the consumer withdraws them from stock. Only at that point does the customer acquire legal ownership of the products from the foreign provider.


Simplifying the EU’s call-off stock regime  


Call-off stock arrangements across the EU member states were standardized on January 1, 2020. Under the simplification rule, the movement of goods in another EU Member State will not trigger a vat related transaction, but the subsequent transfer of ownership of the goods will. The movement of the goods will be treated as an intra-community supply of goods on the supplier’s part. It will be treated as intra-community acquisition in the amount of the recipient.


The call-off stock rules will only apply to arrangements that meet the following conditions: 


  • Goods must be supplied to another Member State by the supplier himself, or through a third party on their behalf, to supply the goods to a recipient who subsequently acquires ownership of the goods via an existing agreement between the parties involved.
  •  The supplier must not be established or have a fixed establishment in the Member State where the goods are supplied.
  • The recipient of the goods who subsequently acquire the ownership of the said goods must be registered for VAT purposes in the Member State where the goods are supplied.
  • The supplier must obtain a record, called as ‘call-off stock register’ of the transfer of goods that will support the claim for call-off stock simplification. The supplier must also record the transfer in the EC Sales List (ESL) with proper identification of the recipient as well as the VAT ID assigned to the recipient in the Member State where the goods are supplied.
  • The actual supply to the intended recipient from the consigned location must occur within 12 months upon arrival of the goods in question.


If all the conditions are complied with, there is a mandatory application of the call-off stock regime.


Last Updated: 17/01/2022


The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax

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