VAT registration of non-resident entities in Portugal. Late registration? A costly correction.
30/09/2026
Late VAT registration in Portugal can trigger a lengthy and complex regulariation process, impacting Corporate Income Tax (IRC) and VAT deductibility.
Following a request submitted by the MFA Legal & Tech team on behalf of a client, the Portuguese Tax Authority (AT) recently clarified the applicable rules in Ofício Circulado No. 25120/2026, as well as through several binding information rulings.
MFA Legal & Tech’s Indirect Tax team has prepared the attached MFA Insight detailing these rules and their potential impact. Key takeaways include:
Requests for retroactive effect are not automatic and can take months (or even years) to be approved by the Tax Authority;
Invoices originally issued with a foreign VAT number must be canceled and reissued using the Portuguese VAT number;
The Tax Authority strictly prohibits aggregated corrective invoices; each invoice must be corrected individually; and
Customers can only deduct VAT after receiving the corrected invoices (subject to a 4-year limit).
Check out our attached MFA Insight for a detailed analysis of all the implications.
