Indirect Taxes
Value Added Tax (VAT)
Exemptions
The basic food basket will no longer benefit from a zero VAT rate.
An exemption from VAT shall apply to entry tickets granted for free to caretakers of disabled people (with a disability degree of 60% or more, duly certified). This shall apply if the disable can only access certain recreational and cultural events or equipment with the help of their caretakers.
There is an extension until 31 December 2024 of the VAT exemption applicable on the sale of fertilisers, soil amendments, and other products used in feeding cattle, birds or other animals, if utilised in agricultural activities.
The exemption applicable to lessons on scholar or higher education subjects no longer requires that the lessons are taught on an individual basis.
An exemption applies on the supply of goods for free aiming at a subsequent distribution to animals that are abandoned or at risk animals, in benefit of the State, social solidarity private institutions and non-profit non-governmental organisations. This results from an extension of the exemption applicable to the supply of goods for free for people in need in benefit of the said entities.
“Zero VAT rate on the basic food basket ends.”
Reduced rate
The supply of chairs and seats suitable for transporting children on bicycles will now be taxed at the reduced rate.
The acquisition, delivery and installation, maintenance and repair of devices, machines and other equipment intended exclusively or mainly for the capture and use of solar, wind, and geothermal energy, and other alternative forms of energy (previously, was limited to the delivery and installation of solar thermal and photovoltaic panels).
There is an extension until 31 December 2024 of the reduced rate applicable to the supply of electricity, excluding the respective fixed components. This applies provided that the power supplied does not exceed 6.90 kVA, and in respect to the amount not exceeding:
a) 100 kWh in a 30 day period.
b) 150 kWh in a 30 day period in the case of large families meaning households with five or more people.
Intermediate rate
The following will benefit from this rate:
Juices, nectars and carbonated waters or waters containing carbon dioxide or other substances, when provided as part of restaurant services.
A specific type of sausage (“alheira”) in animal or synthetic casings, made from bread, composed of meat or another type of fillinga. And
Vegetable and edible oils.
Refund of VAT – Organization of events
Entities whose main activity code (“Código de Atividade Económica” or “CAE”) is 79110 – Travel agencies activities shall benefit from the simplified regime for the refund of VAT. This shall apply to expenses related with the organisation of congresses, fairs, exhibitions, seminars, conferences and similar events, under Article 21, no. 2, letter (d) of the VAT Code.
A rule of non-duplication of benefit is now foreseen in relation to the refund of VAT to these entities, according to which the refund is only applicable to the extent that the VAT incurred is not deductible or has not been refunded under another regime.
Excise Duties (IEC)
Excise duty on alcoholic and sugar-added non-alcoholic beverages (IABA)
Beer
A general increase of around 10% was be introduced.
Sugar-added non-alcoholic beverages
A general increase of around 10% was introduced.
The rates are now the following, depending of the level of sugar and additional sweeteners:
- EUR 1.16 per hectoliter, if less than 25 grams per litre;
- EUR 6.95 per hectoliter, if ranging from 25 to 50 grams per litre;
- EUR 9.26 per hectoliter, if ranging from 50 to 80 grams per litre; and
- EUR 23.18 per hectoliter, if equal or higher than 80 grams per litre.
Concentrates (liquid and powder) incur in the same level of increase in taxation.
Spirit drinks
A general increase of around 10% was introduced.
This increase also applies to the rates in force in the Autonomous Region of Madeira.
Other fermented, still drinks and sparkling wines
A general increase of around 10% was introduced.
Tax on Oil and Energy Products (ISP)
There is an increase of the rates applicable to several products (fuel oil, gas, diesel, etc.) used in the production of electricity, electricity and heat (cogeneration) and city gas. This shall apply both to ISP and to the added CO2.
New increases will apply to the following years, except on natural gas (NC 2711).
There is an increase on the taxation of certain products used in premises subject to energy consumption rationalisation agreements (“ARCE”). A rate corresponding to 65% (formerly, 30%) of the carbon rate applies.
Products classified by CN code 2707 99 99, consumed in the Autonomous Regions of the Azores and Madeira and used in the production of electricity, electricity and heat (cogeneration), or city gas, by entities that carry out these activities as their main activity , are now taxed at a rate corresponding to 75% of the ISP rate and at a rate corresponding to 75% of the additional rate on CO2 emissions.
In 2024 there is no renewal of the temporary exemption applicable in Portugal mainland to products NC 2711 11 00 and 2711 21 00 used in the production of electricity, electricity and heat (cogeneration) or of city gas (that applied in 2023).
Tax on Tobacco
There is an increase of the specific component for conventional cigarettes, heated tobacco and other smoking tobacco, snuff, chewing tobacco (around 35% in conventional cigarettes).
The ad valorem component for conventional cigarettes is set at 1% however it may change based on an automatic update system.
There is an amendment to the applicable total minimum tax of reference, that now considers the higher of the national or european average taxation.
The taxation of conventional cigarettes and other tobacco products tends to be harmonised.
Tax on Tobacco applies to liquids for electronic cigarettes, even without nicotine included. The rate is EUR 0.175/ml.
Circulation Tax (IUC)
There is a general increase by 3% of the amount of IUC.
The additional IUC is maintained in force.
Tax on Vehicles (ISV)
There is a general increase by 5% of the tax rates, in the environmental and cylinder capacity components.
Vehicles under operational leasing (taxis, for State use and authority functions) are exempt from ISV provided that the lease agreement is presented (formerly, the law requires only that the vehicle’s documentation includes the identification of the lessee).
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