In Portugal, under Article 29 and 41 of VAT Code, taxable individuals are required to submit periodic tax returns on a monthly or quarterly basis, depending on their annual turnover. Taxable persons with an annual turnover of € 650,000 or more in the preceding calendar year are required to file monthly tax returns. On the other hand, taxable individuals with an annual turnover of less than € 650,000 in the previous calendar year generally file quarterly tax returns, but they have the option to file monthly returns if they choose to do so.
Taxable persons are typically allowed to deduct input VAT on expenses related to their taxable activities including input VAT on intra-Community acquisitions and imported goods. However, there are certain restrictions on the deduction of input VAT.
Expenses related to the following, generally do not give the right to deduct input VAT, even if incurred for a taxable activity:
Under Article 29 of the Portuguese VAT Code, taxable individuals are required to issue invoices for all goods and services supplied, including exports and supplies within the Community, as well as for any advance payments received. Additionally, a taxable person can reclaim input tax paid on goods and services acquired for business purposes. Generally, this recovery is achieved by deducting the input tax from the output tax charged on the supplies they provide.
Article 9 of the Portuguese VAT Code provides for exemptions on certain supplies, subject to certain conditions and requirements.
Last Updated: 29/11/2023
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