VAT Guide 2026

Portugal VAT Rate 2026 – Complete IVA Guide

Portugal's VAT — known locally as IVA (Imposto sobre o Valor Acrescentado) — is the primary consumption tax in the country. Whether you are a business owner, freelancer, or expat in Portugal, understanding IVA rates is essential for accurate invoicing, pricing, and tax compliance.

Portugal VAT Rates in 2026

Portugal operates three VAT rate tiers. The correct rate depends on the type of goods or services being sold.

Rate	Type	Applies To
23%	Standard	Most goods and services — the default rate
13%	Intermediate	Restaurant meals, wine, certain food products, cultural events
6%	Reduced	Essential foods, books, medicines, hotel accommodation, electricity
0%	Exempt	Medical services, education, banking, insurance, certain exports

Regional Rates — Azores and Madeira

Portugal's autonomous regions have their own lower VAT rates to support their island economies.

Who Must Register for IVA?

Any business or self-employed individual (trabalhador independente) in Portugal must register for IVA if annual turnover exceeds the exemption threshold. As of 2026, businesses with turnover below EUR 15,000 per year may qualify for the small business exemption under Article 53 of the VAT Code.

How to Calculate IVA

Adding IVA to a net price

Multiply the net price by 1.23 for the standard rate. A service costing EUR 100 net becomes EUR 123 including IVA. Formula: Gross = Net x 1.23

Removing IVA from a gross price

Divide the gross price by 1.23. An invoice of EUR 246 including 23% IVA has a net value of EUR 200. Formula: Net = Gross / 1.23. Our free IVA calculator handles all rates automatically.

IVA on Invoices

Portuguese invoices must clearly display the IVA rate, net amount, IVA amount, and gross total. Invoices must be issued through certified invoicing software registered with the Portuguese Tax Authority (AT). Handwritten invoices are no longer compliant for most businesses.

Filing IVA Returns

IVA returns are filed electronically through the Portal das Financas. Most businesses file quarterly. Businesses with annual turnover above EUR 650,000 must file monthly. The deadline is the 20th of the second month following the end of the reporting period.

Frequently Asked Questions

What does IVA stand for in Portugal?

IVA stands for Imposto sobre o Valor Acrescentado — the Portuguese term for Value Added Tax, equivalent to VAT in the UK, TVA in France, and MwSt in Germany.

Is VAT included in prices in Portugal?

Yes. Prices displayed in shops, restaurants, and to consumers must include IVA by law. Business-to-business invoices typically show the net price plus IVA separately.

Can tourists claim VAT refunds in Portugal?

Yes. Non-EU visitors can claim a VAT refund on purchases over EUR 50.01 at participating shops displaying the Tax Free Shopping sign. Request a form at point of sale and present it at the airport before departure.