REMINDER: Portugal – Import VAT reverse charge effective 1 March 2018

29 March 2018

From 1 March 2018, Portugal has extended its current reverse charge mechanism on imports to include all goods imported into the country. Previously this was restricted to certain goods mentioned in the Portuguese VAT legislation.

This will allow any VAT registered businesses to apply to the Portuguese tax authorities for authorisation to use this reverse charge. Once accepted, it will remove the requirement to pay import VAT when goods are cleared into the country and instead the VAT will be deferred to the importing businesses’ VAT return.

It is hoped that this will result in savings on shipping costs and bank charges for the company importing the goods, as well as improve their cash flow as they will no longer have to wait for import VAT to be refunded by the Portuguese tax authorities.