As part of the implementation of EU Directive (EU) 2020/285, Decree-Law No. 33/2025 of 24th of March introduces significant amendments to the Portuguese VAT Code (CIVA), particularly to the VAT exemption regime for small businesses under Article 53.º. These changes will enter into force on 1st of July 2025 and will impact many independent professionals, freelancers, and non-resident operators.
🔁 Key Changes at a Glance:
1. New “EX” Tax Identification Number
Non-residents (within the EU) who wish to benefit from the VAT exemption in Portugal must apply for a specific Portuguese NIF with the suffix “EX”, via notification from their home country’s tax authority to the Portuguese Tax and Customs Authority.
2. Turnover Limits and Tolerance
The standard VAT exemption limit remains 14.500,00 EUR, but a tolerance margin up to 18.750,00 EUR is permitted.
- If the SP earns more than 15.000,00 EUR but less than 18.750,00 EUR during the year:
- A Declaration of Changes must be submitted in January of the following year;
- The SP is automatically moved to the standard VAT regime on 1st of January of that year.
- If the SP exceeds 18.750,00 EUR at any time during the year:
- They must submit a Declaration of Changes within 15 working days after the end of the month in which the threshold was exceeded;
- The VAT regime applies from the 1st day of the following month.
3. Exclusion of Non-EU Operators
Taxpayers established outside the European Union can no longer benefit from the Article 53.º exemption, regardless of turnover.
4. EU-Resident Operators Eligible (With Conditions)
Residents in another EU Member State may benefit from the exemption only if:
- Their total turnover across the EU is less than 100.000,00 EUR per year;
- Their national tax authority formally notifies the Portuguese tax authorities.
5. Quarterly Declaration Required
From 1 July 2025, exempt taxpayers must file a quarterly return declaring:
- Turnover earned in Portugal;
- Turnover earned in the rest of the EU;
- The declaration is due by the end of the month following each quarter.
Who is Affected?
These rules apply to:
- Sole traders and freelancers in Portugal;
- EU-based individuals offering services into Portugal;
- Non-residents previously benefiting from exemption under Article 53.º.
Please contact us if you need assistance with registration, reporting, or reassessment of your VAT status.