Disclaimer: This article provides general information about Portuguese VAT rules and does not constitute tax, legal or accounting advice. Individual circumstances vary and rules change. Always consult a qualified Portuguese accountant or contabilista certificado before making decisions based on this information.
TL;DR
- Whether you charge Portuguese IVA to a client abroad depends on whether they are a business or a private individual, and whether they are inside or outside the EU. It does not depend on where you are.
- Business client anywhere outside Portugal → no Portuguese IVA.
- Private individual elsewhere in the EU → you charge Portuguese IVA, exactly as for a client in Lisbon.
- Private individual outside the EU → usually no IVA, if your work is on a defined list that covers most freelance knowledge work.
- Remote Work Europe verifies these rules against the Codigo do IVA and the Autoridade Tributaria’s own binding rulings.
Most freelancers in Portugal have at least one client abroad, and almost every one of them has stared at a recibo verde wondering whether to add 23% or not.
The answer is not a matter of opinion, and it is not the same for every client. It comes down to three questions, and once you can answer those, every invoice you will ever issue sorts itself.
- Is your client a business or a private individual?
- Are they inside the EU or outside it?
- Are you inside the Article 53 exemption regime?
Does it matter whether my client is a business or a consumer?
Almost all the confusion in this area comes from people applying a business-client rule to a consumer, or the reverse. Portuguese VAT law treats them completely differently, and it is the customer’s status that decides, not yours.
A “business” here means a taxable person – someone registered for VAT in their own country, who can evidence it. A private individual is not, and neither is a business too small to be registered.
Worked example. Ines is a UX designer in Porto. In one month she invoices a software company in Munich, a private individual in Dublin who wants a personal portfolio site, and a marketing consultancy in Toronto. Three foreign clients, three different IVA treatments — set out below.
Do I charge Portuguese IVA to a business client abroad?
If your client is a business established outside Portugal, the service is not located in Portugal and you do not charge Portuguese IVA. This holds whether they are in Germany or in California.
The general rule places a business-to-business service where the customer is established, rather than where you are. Since your customer is not in Portugal, neither is the supply – so there is no Portuguese tax to charge. The tax authority has confirmed this in a binding ruling for both cases: EU business clients and non-EU business clients alike.
For an EU business client, the customer accounts for the VAT themselves in their own country under the reverse charge. Get and check their VAT number before you invoice – it is the evidence that they are a taxable person, and without it you are not entitled to treat the supply this way.
Do I charge IVA to a private client in another EU country?
This is the one that surprises people, and it is the most expensive to get wrong.
Where your client is a private individual, the rule flips: the service is located where you are established. You are in Portugal, so the supply is Portuguese, and you charge Portuguese IVA at the rate for your activity – exactly as you would for a client in Lisbon.
Back to Ines: the private individual in Dublin gets Portuguese IVA on the invoice. Being in different countries makes no difference at all, because the customer is not a business — and the instinct that “foreign client means no VAT” is precisely backwards for this case.
Do I charge IVA to a private client outside the EU?
Here the rule flips back, but only for particular kinds of work – and the list happens to cover most of what freelancers reading this actually do.
Where the customer is a private individual established or domiciled outside the EU, these services are not taxable in Portugal:
- consultants, engineers, lawyers, economists and accountants, and study bureaux in all fields, including organisation, research and development
- data processing and the supply of information
- advertising services
- assignment or licensing of copyright, patents, licences, trademarks and analogous rights
- supply of staff
- hire of movable tangible property, other than transport
The tax authority reads that list as extending to similar services, so it is broader than the literal professions named.
⚠️ But it is a list, not a general principle. If what you do is not on it and is not similar to something on it, the ordinary rule returns and you charge Portuguese IVA even to a private client in Australia. Work that is tied to a physical place – anything relating to a specific property, or performed in person somewhere – follows entirely separate rules that are not covered here.
Portuguese IVA on foreign invoices: the four cases
| Your client | Where | Portuguese IVA? |
|---|---|---|
| Business | Anywhere outside Portugal | No – not located in Portugal |
| Private individual | Elsewhere in the EU | Yes – at your activity’s rate |
| Private individual | Outside the EU | Usually no, if your service is on the list above |
| Anyone | In Portugal | Yes, ordinary rules |
What do I actually write on the recibo verde?
Two different things get confused here, because there are two separate mentions and they apply for two different reasons.
If you are inside the Article 53 exemption, every invoice you issue must carry the words:
IVA – regime de isenção
That is required by the Código do IVA itself, and it applies to all your invoices, domestic and foreign, because it describes you rather than the transaction. The €15,000 threshold behind that regime is covered in our guide to whether Portugal’s VAT threshold is €15,000 or €25,000.
If the supply is simply not located in Portugal – a business client abroad, or a non-EU private client on the list – you must state the reason the tax has not been charged. The invoice is not silent on the point; it explains itself. For an EU business client under reverse charge, that mention also signals to your customer that they must account for the VAT at their end.
⚠️ You must still issue an invoice even when no Portuguese tax applies. This catches people out badly. The obligation to invoice covers every supply of services you make, regardless of the customer’s status, and regardless of whether they ask for one – and it applies even where the operation is not located in and not taxed in Portugal. “No IVA” never means “no invoice”. Which mechanism you use to issue it is a separate question, answered in our guide to whether you need certified invoicing software in Portugal.
Can I keep the Article 53 exemption if I invoice abroad?
Yes. This question generates enormous confusion, because Article 53 excludes anyone carrying out “exports or related activities”, and people reasonably assume invoicing abroad counts.
The tax authority has now addressed it directly: taxable persons established in Portugal under the Article 53 regime are not prevented from carrying out cross-border operations, with exports and related activities the exception.
In the code, exports are defined by reference to goods dispatched or transported outside the Community. So a freelancer selling services abroad is doing cross-border business rather than exporting.
Worked example. Rui is a translator in Coimbra billing about €11,000 a year, almost all of it to publishers in France and the Netherlands. He is inside the Article 53 exemption and stays inside it. His invoices carry IVA – regime de isenção, and his French and Dutch clients account for VAT at their end.
⚠️ If you sell physical goods as well as services, take advice. That is where the exclusion genuinely bites, and there is a further trap: goods supplied by an exempt person to businesses in other Member States do not get the usual intra-Community exemption.
What is a declaracao recapitulativa, and do I need to file one?
If you supply services to VAT-registered businesses elsewhere in the EU, you file a declaração recapitulativa listing them – separately from, and on a different cycle to, your periodic return.
On the quarterly cycle it falls due on 20 January, 20 April, 20 July and 20 October. It is easy to miss precisely because those dates do not line up with anything else in your year. The full rhythm is set out in our Portugal freelancer compliance calendar.
The short version
- Business client abroad → no Portuguese IVA, get their VAT number, and file the recapitulative statement if they are in the EU
- Private client in the EU → charge Portuguese IVA
- Private client outside the EU → usually no IVA, if your work is on the list
- Always issue the invoice, and always state why tax has not been charged
- Article 53 exempt? Then
IVA – regime de isençãogoes on everything, and foreign clients do not put your exemption at risk
Frequently asked questions
Do I need my EU client’s VAT number before I invoice them? Yes. It is the evidence that they are a taxable person, which is what allows you to treat the supply as not located in Portugal. Check it rather than take it on trust.
My client is a small business abroad but is not VAT-registered. What then? For these purposes they are not a taxable person, so the private-individual rules apply — which for an EU client means charging Portuguese IVA.
Does it matter that I am paid in dollars or sterling? The currency does not change which of the four cases you are in. Which exchange rate applies is a separate question and is not covered here — ask your contabilista.
I am exempt under Article 53. Do I still put anything about VAT on the invoice?
Yes. Every invoice must carry IVA – regime de isenção while you are inside that regime.
Does invoicing foreign clients push me over the €15,000 threshold faster? The threshold is measured on national turnover. How that interacts with your own mix of cross-border work is worth checking with your accountant.
What to look at next
If you are working out whether you are inside the exemption at all, start with the €15,000 and €25,000 thresholds. For the wider rhythm of what you file and when, see the Portugal freelancer compliance calendar. If you have recently arrived and are still working out the tax side, our Portugal remote work guide is the overview and Portugal’s tax reality for remote workers covers what replaced NHR.
