Certified billing software in Portugal as from 1 July 2019
The requirement of using a certified billing software in Portugal will be extended as from 1 July 2019.
4 May, 2019
Most Portuguese businesses were already required to issue invoices from a certified billing software. Former rules required all established companies to use this software when their previous annual revenue exceeded € 100,000, this threshold was now decreased to € 75,000 in 2019 and €50,000 in 2020.
Non-established companies are also required to use a certified billing software as from 1 July 2019. The information about this obligation has been ambiguous, so we elaborated our conclusion below under section ´Portuguese Certified billing software for non-established companies´
Certain transactions are excluded from this obligation, including:
- Invoices issued under reverse charge mechanism
- Invoices issued for public events such as ticket for museums or shows, concerts (bearer documents).
What is a certified billing software?
A certified billing software in Portugal meets several requirements that reduce potential manipulation of business accounting. For example, this software does not allow to change manually an invoice already issued, it also does not allow the issuance of an invoice with a date in the past.
The authorities evaluate each billing software or ERP and , once they confirm that it is compliant with their requirements, they allocate a registration number to the software. This number must be indicated in each invoice.
In practice, most Portuguese companies already have a local certified billing software that meet their requirements. Some foreign businesses established in Portugal have gone through the process of validating their existing ERP.
For non-established companies, we propose using an external solution that receives a file issued by the ERP and generates the invoice according to the new requirements (including the registration number). The invoice is then sent to the final client or sent back your ERP so it can be sent to the client with your usual method.
What are the penalties for not complying with the Portuguese certified invoicing requirement?
When invoices are not issued with a certified billing software, there is a risk of these invoices being considered as invalid expenses, both for CIT and VAT, by the Portuguese Tax Authorities and also clients. For example, in established companies which are obliged to use certified software, it is very common to see accountancy departments returning invoices which do not show the correct hashtag of the certified software or which are not issued from a certified software.
In addition, there are specific sanctions foreseen in the law for not meeting this requirement. Under the General Infractions Code, the issuance of invoices without certified software can be sanctioned (in wide terms) as follows
|Type of infraction||Penalty considering negligent behaviour|
|Failure to issue invoices or receipts||€ 300 to € 3,750|
|Failure to request invoices or receipts issued within the law||€ 150 to € 2,000|
|Failure to use certified invoicing software or equipment||€ 3,000 to € 18,750|
The above fees would double in case of fraud or knowledge about the infraction made.
Portuguese Certified billing software for non-established companies
With respect to the scope of this new obligation, Article 4 of DL 28/2019 is clear in the sense that the annual revenue threshold is lowered from € 100,000 to € 75,000 in 2019 and € 50,000 in 2020.
However, this article is not clear in what regards to the extension to VAT registered non-established companies (“mere VAT registers”) of this new obligation.
Article 4 of the Decree, in the first para , number 1, states that certified software scope now includes all taxable persons which must issue invoices under Portuguese law in accordance with article 35A of the VAT Code (219-A of the VAT Directive), this article dictates that invoices for local supplies of services or goods are subject to the Portuguese invoicing requirement rules. However, these persons are only obliged to issue certified software when falling within the letters a) b) and c) of this article. This is the aspect on which local advisors and official tax associations were doubtful on whether a) to c) are cumulative requirements or not:
Obligation to use specific medium
1.For the purposes of the preceding article, taxable persons having their registered office, permanent establishment or domicile in the national territory and other taxable persons whose obligation to issue an invoice is subject to the rules established in domestic law in accordance with Article 35a of the VAT Code, are obliged to use exclusively software that has been subject to prior certification by the Tax Authorities, when:
(a) they have had a turnover in the preceding calendar year in excess of (euro) 50 000, or when the reference period is less than the calendar year in the year in which the activity begins and the annualized turnover period is higher than that amount;
(b) use invoicing software;
(c) they are obliged to have organized accountancy or have opted for them.
If you read these letters cumulatively, then mere VAT registers would be excluded of the obligation to use certified software due to not having organized accountancy in Portugal (only in country of establishment).
It appears however that the article is being interpreted by the Tax Authorities as meaning that indents are read separately, so regardless of having organized accountancy or not, mere VAT registers with a turnover higher than € 75,000 in 2018 (€50,000 in 2019) are subject to using certified software due to falling within article 4(1)(a). This interpretation has not been officially confirmed by the Tax Authorities - which was expected to issue a Generic Ruling on this in the beginning of April but has not published it so far - but it does derive from a number of informal contacts held with responsible of central services, other tax advisors and the Accountants Bar.
Portuguese SAF-T returns
There are no changes on the obligation to report Portuguese SAF-T returns. These reports are only required by established companies in Portugal.
However, we believe that having a certified billing software will quickly extend the SAF-T obligation to non-established companies also.
Marosa´s proposed billing software is able to generate a monthly SAF-T report automatically each reporting period.
What is the difference between the e-invoicing requirement in 31 December 2020 and certified invoicing requirement in July 2019?
- E-invoicing requirements apply to the way the electronic invoices are issued in itself. As from 31 December 2020, tax authorities will require features that secure the authenticity of the electronic invoice like electronic qualified signature, qualified electronic stamp or EDI protocol. These are add-ons to the invoices itself. Currently, you can issue e-invoices either with advanced electronic signature or just by implementing controls that provide a reliable audit trail that attest to the integrity and authenticity of the document. The wording of article 12 of DL 28/2019 + article 43(10) indicate that after 31 December 2020, the integrity and authenticity of the document are guaranteed if, namely, the apposition of an electronic qualified signature, qualified electronic protocol or EDI protocol. This wording is being understood by advisors (such as the ones you indicate) as meaning that only of these means may be used to have a valid e-invoice.
- Certified invoicing requirements relate to the data structure of the software that issues the invoices itself, the taxonomies which may be used and also the permissions and prohibitions of the certified invoicing system (for example, the system may not allow for invoices to be changed after issuance; for this, a rectification document such as a credit or debit note must be issued).