Starting on 1 July 2026, Portugal will introduce a new VAT grouping regime, allowing eligible corporate groups to consolidate the VAT payable and recoverable positions of participating entities through a group-level return.
Our Tax team has analysed the new framework, focusing on how groups can leverage this mechanism.
Key takeaways:
- Automatic Offset: Automatic consolidation of VAT debtor and creditor positions at the group level.
- The Catch: Unlike other EU models, intra-group transactions in Portugal remain subject to VAT under general rules.
- Implementation: Success will depend on how corporate structures and operating models adapt to these new rules.
