On 15 April 2025, the Portuguese Tax and Customs Authority issued Circular No. 25066, announcing key VAT simplification measures aimed at reducing compliance burdens for small businesses and supporting the transition to digital tax reporting.
These measures took effect from 1 July 2025.
Some of the key changes include:
1. Quarterly filing option for small businesses:
Taxpayers with annual turnover below €650,000 can now opt out of monthly VAT reporting without the previous requirement of having completed three years of monthly filings.
This change offers greater flexibility for small businesses, allowing them to move to quarterly VAT returns upon submission of a formal request.
2. Introduction of pre-filled VAT returns:
As part of Portugal’s push toward digitisation and automation, pre-filled VAT returns were available from 1 July 2025 via the e-Portal for eligible businesses.
Provisional VAT returns will be made available to qualifying taxpayers.
Taxpayers may confirm and submit the pre-filled return as their official VAT declaration.
If no transactions are made during the period and the taxpayer does not validate or submit a return manually, the provisional return will be considered submitted by default.
Businesses not covered or partially covered by the pre-filled VAT returns must still submit their returns manually by the legal deadline.
Eligibility and Scope (Per Order No. 242/2025/1 of 29 May 2025).
To qualify for pre-filled VAT returns, the taxpayer must:
- Be established in Portugal
- Not be registered under the Cash Accounting Scheme
- Have classified invoices and invoice correction documents in which they appear as the purchaser.
Pre-filled returns do not apply to:
- Imports and exports
- Acquisitions of goods or services where the taxpayer is the recipient
- Transactions subject to special VAT regimes.
Additionally, invoices manually registered by the purchaser in the e-invoice platform (because the issuer did not previously communicate them) will not be included in the pre-filled VAT return for VAT deduction purposes.
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Authors
Lisa Dowling
Specialising in International VAT Compliance solutions, Lisa brings a wealth of knowledge and insight in her dealings with a host of international clients ranging from start-ups through to multinationals. With 21 years VAT experience behind her, Lisa has managed VAT compliance issues and solutions globally for for over 11 years. Fintua have 12,000 + corporate clients in over 109 countries and many of these are members of the Fortune 500.
