Are you under the VAT exemption scheme and will you exceed the ceiling? What to do

Quem is in the VAT exemption scheme of Article 53 of the VAT Code (VAT) but exceeds the ceiling laid down in the law is obliged to pay tax, according to the Tax and Customs Authority (AT). 

“Are you an independent worker and are you covered by the special exemption scheme of Article 53 of the IVA? October is the ideal month to do accounts and realize if it will exceed the limit of €15.000 turnover“, can be read in a publication shared by Fisco on social networks. 

Finance recalls that it can no longer benefit from this scheme if:

• “ Any minute now, exceed by more than 25% the limit of € 15,000, i.e. make more than € 18.750€. The exclusion of the scheme is immediate, must charge VAT on the invoice in which it exceeds the limit and deliver the declaration of amendments within 15 working days of the date on which the limit was exceeded”;
• “By the end of 2026 make more than €15.000 and less than €18.750€. The exclusion of the scheme shall enter into force from 1 January 2027 and shall deliver the declaration of amendments within 15 working days of the end of the calendar year.”.

What is VAT? 

VAT is Value Added Tax, which in practice is a tax on sales or services in Portugal.

“VAT is paid by the consumer when it pays for the good or service provided. The seller or service provider receives the value of the VAT and then delivers it to the Tax and Customs Authority”, can be read on the public service portal gov.pt.

Communicate the start of activity

This means that “individuals (independent workers) or collectives (enterprises) who produce, market or provide services in Portugal have to pay taxes, so they have to submit the declaration of start of business”.

However, “self-employed persons are not obliged to declare the start of activity if they do only one single act (receive only once during the year for the sale of goods or services) that does not exceed EUR 25 thousand”, according to the same portal. 

In general, “the independent worker or company must deliver the declaration of commencement of activity before starting the activity”.

“ For companies which are registered in a commercial registry, the declaration of commencement of business must be delivered within 15 days of registration in the conservatory”, it is further explained.