Do I have to charge VAT as a freelancer in Portugal, and what is the exemption threshold?

Checked on 2026-10-25

You are exempt from VAT in Portugal if your business is based in Portugal, does not export, and your annual turnover in Portugal did not exceed €15,000 in the previous calendar year. In your first year your own estimate counts. Exceeding €15,000 ends the exemption from next January; exceeding it by more than 25% ends it immediately.

Key facts

What	The law says	Source
Threshold	Annual turnover in Portugal of no more than €15,000 in the previous calendar year	Código do IVA, art. 53(1)
Other conditions	Seat or domicile in Portugal; no exports or related activities	Código do IVA, art. 53(1)
First year of activity	Your estimate of turnover for the current calendar year counts	Código do IVA, art. 53(5)
What you give up	No deduction of input VAT and no VAT refunds on the exempt operations	Código do IVA, art. 53(3)
Over €15,000 in a year	VAT is due from 1 January of the following year	Código do IVA, art. 58(2)(a), (4)(a)
More than 25% above €15,000 in the current year	VAT is due from the moment the threshold is exceeded by more than 25%	Código do IVA, art. 58(2)(b), (4)(b)
Telling the tax authority	Change declaration within 15 working days	Código do IVA, art. 58(5)
What counts as turnover	Amounts net of VAT; sales of capital goods are left out	Código do IVA, art. 52-B

Who doesn’t charge VAT

Article 53 of the VAT Code, as reworded by Decreto-Lei 35/2025, exempts taxable persons with their seat or domicile in Portugal that don’t carry out exports or related activities and whose annual turnover in Portugal did not exceed €15,000 in the previous calendar year. If you are just starting, the law uses your own estimate for the current year (art. 53(5)).

Being exempt also means you can’t deduct the VAT you pay on your own purchases (art. 53(3)).

When the exemption ends

Article 58 sets two triggers:

Previous year over €15,000. You lose the exemption and VAT is due from 1 January of the next year. You must file a change declaration within 15 working days of the last day of the year in which you exceeded the threshold.
Current year more than 25% over. If your turnover in the current year passes the threshold by more than 25%, VAT is due from that moment, and the change declaration is due within 15 working days.

The exemption also ends if you stop meeting any of the other conditions of article 53(1).

Withholding tax: the same €15,000 figure is the limit for opting out of IRS withholding on self-employed income (Código do IRS, art. 101-B(1)(a)).
Businesses based in other EU countries can use the Portuguese exemption only with EU turnover of €100,000 or less, a prior notification to their own country and an “EX” identification number (Código do IVA, art. 53(2)).

Sources

Change history

2026-10-25: Page created

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