A new intermediate VAT rate in Portugal
A new intermediate VAT rate of 13% will be introduced in Portugal.
The scope of the new reduced rate will include meals on restaurants and cafés, as well as services delivered by these businesses. The intrdution of the new VAT rate in Portugal is planed to be in July 2016.
More changes on the reduced rates were introduced in April 2016, with bread being subject to the super-reduced rate (but all products similar to bread will be standard rated). Juices, seaweed (considered as food product) and vegetables are also subject to the reduced VAT rate as from April.
Ever since the start of the financial crisis in 2007, almost all Member States have opted for increasing their VAT rates to compensate the decrease on other tax revenues. Following recommendations of the European Commission and OECD, reduced VAT rates accumulated most changes, with the basket of goods subject to these rates gradually becoming standard rated items. Portugal is now challenging these guidelines due to political changes in the government and better economic forecast for the country.