VAT regularisations and invoice corrections in Portugal: What changes with Ofício-Circulado No. 25120/2026?

The Tax Authority (AT) recently clarified, through Ofício-Circulado No. 25.120/2026, the rules and procedures applicable to invoice corrections, VAT regularisations, and deductions, detailing reporting procedures and associated deadlines.

MFA Legal & Tech’s Indirect Tax team has prepared the MFA Insight below, analyzing the operational procedures and their potential impacts. Key takeaways include:

• Starting in 2027, the single procedure of issuing a credit note and a new invoice to correct invoices will no longer apply. Formal errors require cancellation and the issuance of a new invoice, whereas changes to the taxable base or VAT require issuing a credit or debit note;

• Regularisations in favor of the taxable person must be reported in Field 40 of the periodic return for the period in which the credit note is issued. Regularisations in favor of the State must be reported via an amended periodic return for the original period;

• Errors in law benefit from a 4-year deadline, while material or billing errors are limited to 2 years; and

• Companies have a transitional period until 31/12/2026 to adapt their billing systems.

Check out our MFA Insight below for a detailed analysis of all the implications.