VAT for Freelancers in Portugal: When You Need to Charge IVA

• Self-employed people (recibos verdes) with turnover up to €15,000/year can stay under the Article 53 CIVA exemption and never charge IVA at all.
• Cross that threshold by more than 25% (above €18,750) during the year and you're moved into the normal VAT regime immediately — not at year-end.
• Cross it by less than 25% and the exemption still ends, but only from 1 January of the following year.
• Once you're in the normal regime, standard IVA is 23% on the mainland (22% in Madeira, 16% in the Azores), and you must file a periodic VAT return — monthly or quarterly — by the 20th of the second month after the period.

If you're self-employed in Portugal and invoicing on recibos verdes, IVA (Portugal's VAT) is one of the first things you have to decide when you open atividade: whether you'll charge it on every invoice from day one, or qualify for the small-operator exemption instead. Most freelancers starting out fall into the second group — but the threshold that keeps you there is worth understanding before you're surprised by it.

The Article 53 exemption (regime especial de isenção)

Article 53 of the CIVA (Código do IVA) lets small operators skip charging IVA altogether. To qualify, as a self-employed person you generally need to: be established in Portugal, not be legally required to keep organized accounting for IRS purposes, not carry out import/export activity, and — the headline number — have had an annual turnover in the previous calendar year at or below €15,000. This €15,000 ceiling was set by Decreto-Lei n.º 35/2025 (in force since 1 July 2025), which revised the regime; the sources describe it as a revision without stating what the previous ceiling was, so treat any older figure you see elsewhere as potentially out of date.

• You declare your estimated turnover when you open atividade at the Portal das Finanças, and you can opt into the exemption regime at that point if you expect to stay under the threshold.
• While exempt, you still register for activity, still issue an invoice for every operation, and that invoice must carry the wording "IVA — regime de isenção" instead of a VAT amount.
• You still have to report your invoices through e-Fatura by the 5th of the following month, even though you're not charging IVA on them.
• What you don't do while exempt: charge IVA, file a periodic VAT return, deduct the IVA you're charged on business purchases, or claim VAT refunds.

What happens when you cross the threshold

Crossing €15,000 doesn't always flip a switch immediately — the timing depends on how far over you go, and it isn't optional either way. You have to notify the tax authority (declaração de alterações) within 15 days once you know you've breached the conditions.

• Turnover ended up above €15,000 last year, but you didn't breach it by more than 25% during the year: you keep the exemption for the rest of that year, and the normal regime only applies from 1 January of the following year.
• Turnover breaches €15,000 by more than 25% (i.e., passes €18,750) at some point during the current year: the normal regime applies immediately, from that moment — you don't wait for the following year.
• Either way, you're now expected to charge IVA on your invoices, and you lose the exemption's simplified obligations.

One thing that works in your favor when you move to the normal regime: you may be able to reclaim (regularize) IVA you paid on qualifying fixed assets bought while you were still exempt, as long as they're still inside the applicable adjustment period (5 years for movable assets, 20 for immovable property).

You can also choose to opt out of the exemption voluntarily (renúncia à isenção) even if your turnover stays under €15,000 — useful if you invoice mostly other businesses and want to deduct the IVA on your own expenses. This choice is binding for 5 years, so it's worth modeling out before you commit.

Standard IVA rates

Once you're charging IVA, which rate applies depends on what you're billing and where you're established. On the mainland: 6% (reduced, essential goods and services), 13% (intermediate, mainly restaurant and catering services), and 23% (standard rate for anything not on the reduced/intermediate lists) — which is what applies to most freelance and consulting services. Madeira and the Azores run their own, lower rates: 5% / 12% / 22% in Madeira, and 4% / 9% / 16% in the Azores.

Filing once you're registered for IVA

Registered, non-exempt sole traders file a declaração periódica (periodic VAT return): monthly if your turnover in the previous year reached €650,000 or more, quarterly otherwise (you can opt irrevocably into monthly filing for 3 years even below that threshold). Since 1 July 2025 the deadlines were unified: both monthly and quarterly returns are due by the 20th of the second month after the period ends — for quarterly filers that means 20 February, 20 May, 20 September and 20 November for the four quarters. Any IVA due is payable on the same date as the return.

A few obligations apply regardless of exemption status: you must submit a declaração de início de atividade before you start invoicing, issue a compliant invoice for every operation, and communicate your invoices through e-Fatura by the 5th of the following month. If your turnover passes €50,000, you're also required to use certified invoicing software.