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Decree-Law 35/2025 was published today, introducing significant amendments to the VAT rules applicable to small businesses making sales in the European Union:
- Who can benefit? Companies domiciled in or with their registered office in Portugal with an annual turnover of up to €15,000 in national territory, even if they have organised accounts. If the company operates in other EU Member States and its annual turnover in the EU does not exceed €100,000, it can benefit from the exemption scheme in those countries, provided that the local turnover is below the threshold for each country. To do so, they must notify the Portuguese Tax and Customs Authority (‘AT’).
- Less paper? Yes, several VAT obligations will be waived, such as the submission of recapitulative statements and the possibility of simply issuing simplified invoices.
- Is there a transition period? Companies that are already benefiting from the exemption scheme and want to benefit from the new rules must submit the amendment statement in June 2025, with effect from 1 July 2025.
What to do now?
- Check whether the limits of €15,000 (national) or €100,000 (EU) apply to your company.
- If you sell products in other Member States, consider joining the cross-border exemption scheme and send the prior notice to the AT.
This is an opportunity to reduce administrative costs and simplify reporting, which is why CCA is available to help assess the applicability of the framework, set the roadmap for implementing the new procedures and draw up any reports and communications to the AT.