Portugal reduces VAT rates on certain goods and services in 2023

A temporary zero VAT rate for certain basic foodstuffs

## Update September 2023: The Portuguese government announced the deadline extension to apply the zero VAT rate on the list of essential food products until 31 December 2023.

The Portuguese government approved as a temporary measure the zero VAT rate (with right to deduct) on a list of essential food products. The zero VAT rate will apply both for the import and domestic supplies made in Portugal, made from 18 April to 31 October 2023 (now extended until 31 December). The list of products included on the temporary 0% VAT rate corresponds to healthy essential foodstuffs, such as vegetables, fruits, oils, fish and meat. Find here the full list of products and directly refer to the Portuguese VAT Law implementing this measure.

Reduced VAT rate 6% in Portugal 

Portugal reduces VAT rates on certain goods and services in 2023. The scope of the 6% reduced rate is extended to include a new set of products and services.

Some of these categories are subject to 6% reduced VAT rate in Portugal are:

• Canned fish and mollusks when the content of fish is at least 50%.
• Vegetal butter, drinks, and yogurts. These can be produced based on dry fruits, cereals, fruits, vegetables, etc.
• Sale or repair service of bicycles. However, when it concerns the sale of spare parts of the bicycle, these will be subject to the standard VAT rate (23%).
• Access to direct broadcasting of concerts, theatres, amusement parks, museums, cinemas and similar events.
• Sale and installation of specific heaters and boilers that work with biomass.
• Pellets and briquets made from biomass.

Registration threshold for established companies in Portugal

Separately, the VAT registration threshold for established companies will progressively increase from 2023 to 2025 until reaching the EUR 15,000 threshold:

• 2023: EUR 13,500
• 2024: EUR 24,500
• 2025: EUR 15,000

The official notice can be found here.