Indirect Taxes


Reduced VAT rate

The VAT Code shall include a provision according to which the reduced VAT rate applies to respiratory protective mask and disinfectant gel.

Certification of bad debts

Certification of bad debt can be made by an independent statutory auditor or certified accountant in case the amount of tax to regularise is of an amount up to EUR 10,000 by means of an upfront authorisation request (instead of the tax return). This amendment has interpretative nature.

Exemption on the supply of goods to combat the pandemic

The supply of medical devices and equipment to combat the pandemic is exempt from VAT until 30 April 2021. Law 13/2020 of 7 May lists said devices and equipment, as well as the acquiring entities.

The above exemption is extended to supplies of goods to scientific and higher educational institutions.

Beneficiaries of a full or partial refund corresponding to the amount of VAT incurred

Higher educational institutions and non profit organisations part of the national science and technology network (duly registered in the National Inquiry of Scientific and Technological Potential – “Potencial Científico e Tecnológico Nacional” or “IPTCN”) can benefit from a full or partial refund corresponding to the amount of VAT incurred in certain acquisitions of goods or services. These should be related with the respective R&D activity. The VAT included in said expenses must be deductible (as per Article 21 of the VAT Code).


The entry into force of the new rules applicable to e-commerce with individuals was postponed to 1 July 2021. E-commerce operators intending to apply the special VAT regimes foreseen in the relevant legislation can register electronically with the Tax Authorities, from 1 April to 30 June 2021.


The insertion of the QR Code and ATCUD on invoices and other tax relevant documents is an option in 2021. It shall be mandatory from 1 January 2022 onward.

VAT voucher (“IVAucher”)

IVAucher aims at fostering private consumption in the hospitality, cultural and catering industry, all severely affected by the pandemic.

The amount of VAT incurred in said consumptions each quarter will grant a discount on the same type of consumptions in the following quarter.

This incentive requires consent by the private consumer, as well as communication of the respective invoices to the Tax Authorities. It shall be made by interbank settlement.

The Government shall establish the scope and specific terms of this incentive.

Legislative authorisations

Utensils for disabled people

The legislative authorisation already granted in the 2020 State Budget law is foreseen in the 2021 State Budget law. The intention is to extend the reduced VAT rate currently applicable to supplies, leasing and maintenance of utensils and all sorts of devices or objects specifically for the use of disabled people.

Reduced VAT rate on beverages supplied in restauration

The 2021 State Budget does not include a legislative authorisation related with the reduction of the VAT rate on beverages supplied in the restauration. All amendments to this proposal have been rejected.

Circulation Tax

A 50% tax relief applies to vehicles classified as Category C with gross weight above 3.500 Kg and used exclusively in the entertainment industry.

The aggravated Circulation Tax (“Imposto Único de Circulação” or “IUC”) applicable to diesel vehicles classified as Categories A and B is maintained in 2021.

Tax on Vehicles

There is now an environmental component for the purpose of assessing the rate applicable to second hand vehicles originating in the European Union. 

Aggravated taxation of hybrid, hybrid plug-in and gas moved vehicles with higher cubic or power and higher emissions when compared with conventional vehicles even with less cubic or power.

Excise Duties

Tax on oil and energy products (“ISP”)

The unit rates of ISP remain unchanged. The inflation index is not being considered.

Advanced biofuels are fully exempt from ISP provided that they are certified with the biofuel title (“Título de Biocombustível” or “TdB”). Renewable gases are also fully exempt provided that they are certified with guarantee of origin (“Garantia de Origem” or “GO”).

There is an increase of the tax rates applicable to a number of products used in the production of electricity, combined heat and power and town gas. This applies to entities having such activity as their main business, either in Portugal mainland and in the Autonomous Regions. Additional increases are also foreseen for 2022 and following years.

A number of these products if used in premises subject to an energy consumption rationalisation plan (“acordo de racionalização dos consumos de energia” or “ARCE”) shall be subject to taxation. Taxation does not apply if such products are covered by the European Emissions Trading Scheme (EETS).

The aggravated ISP applicable to gasoline and diesel is maintained.

In 2021, the Government shall endeavour restrictions to apply from 1 January 2022 on the sale and production of fuel and biofuel that include oil palm.

The exemption of ISP on diesel and fuel oil used in dredging of ports and waterways.

Alcoholic beverages

There is a reduction by 50% of the taxation of spirit drinks (liquor, brandy and rum) produced in the Autonomous Regions of Madeira and of the Azores, introduced for consumption in the mainland.

It is reduced by 75% the tax rate applicable to products derived from strawberry trees in certain municipialites and under the conditions established by law, as per egulation (EC) No 110/2008 of the European Parliament and of the Council of 15 January 2008.


The computation of the minimum reference total tax is amended. It shall be linked to the weighted average price of the cigarettes introduced in consumption. Currently, such computation considers only the higher class of sales prices.


“The taxation of fossil fuels is progressively increased.”

Contact us

Rosa Areias

Rosa Areias

Tax Lead Partner | Entrepreneurial & Private Business Leader | Membro da Comissão Executiva, PwC Portugal

Tel: +351 225 433 101