Update Portuguese electronic invoicing
Portuguese established companies are required to issue invoices using a certified invoicing software when their annual revenue has exceeded €100.000 in the previous year. This threshold has changed to €75.000 in 2019 and will decrease to €50.000 in 2020.
In the new decree-law N.º 28/2019 dated February 2019, the Portuguese Tax Authorities have defined/clarified the rules regarding the certified software and the invoices requirements. It is now stated that it is mandatory for all companies registered in Portugal (established and/or not established) to issue invoices using a certified software as from July 1, 2019. However, several queries have been raised regarding the implementation of this procedures for non-resident companies, with no fixed establishment and only a registration for VAT purposes.
Clarification of the situation
From our local partner we have understood that the Law is not clear enough in this particular situation, and it has been confirmed by the Portuguese Tax Authorities that official information clarifying this topic will be published soon. Until today, however no official communication has been issued. We did understand that entities that have appointed a tax representative in Portugal are obliged to comply with the new requirements (pursuant to Article 30 (2) and (3) PT VAT Code).
At this moment it cannot be 100% confirmed that the Portuguese invoicing software rules and procedures apply to non-resident companies that have a direct VAT registration in Portugal but this does seem from the published text.
If the rules also apply to non-residents, this has of course some implications and challenges. For example, it will also be mandatory to inform the Portuguese Tax Authorities about the location of the physical archive of the invoices issued and all the supporting accounting documents, as well where the digital archive is made (if applicable). Should this be outside Portugal, it will be necessary to obtain pre-approval from the Portuguese Tax Authorities.
Update from Portuguese Tax Authorities
We will have to wait for an official update from the Portuguese Tax Authorities. However as the official start date communicated is July 1, we need to be alert and closely monitor the publications.