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”.
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.
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.
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.
If all the conditions are complied with, there is a mandatory application of the call-off stock regime.
Last Updated: 17/01/2022
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The order was issued on the 27th of July 2021 and it involves: The extension of monthly VAT return submissions for the months of September, October, November, and December
– Invoices in PDF format considered as electronic invoices for tax purposes, must be accepted until 30 June 2022
– The requirement for taxpayers to communicate serial declaration is suspended during 2022
– The extended payment deadlines for the remaining months of 2021 and for 2022 are: