Portugal’s invoicing rules are changing

Over the past few years, Portugal has been committed to modernising its electronic invoicing system to tackle the “hidden economy” that contributes to its 10% VAT gap.

The authorities had planned to implement invoicing changes throughout 2020 — and then the pandemic happened. This unprecedented turn of events meant the government had to shake up their approach and create an entirely new timeline for invoice digitalisation.

With 2022 just around the corner, deadlines for compliance are now looming. In this brief guide, we will walk you through the upcoming changes to Portugal’s invoicing requirements.

1. The QR Code

The Portuguese government initially introduced QR codes on invoices in January 2021 but had to postpone implementation due to the pandemic. However, including a QR code on all invoices — both printed and electronic — will become a requirement from January 2022.

The QR code needs to be at least 30x30mm and should be displayed on the first page of the invoice.

The main purpose of using QR codes on invoices is so that information can be structured in a way that allows it to be processed by IT systems. It will contain dozens of fields with data about the invoice, which will need to be mapped using SAF-T. The fields will consist of a code and description, e.g., A = the TIN (tax identification number) of the issuer

2. The ATCUD code

ATCUD is a unique document number that identifies invoices and confirms their validity. 

Up until October 2021, it was expected that businesses would need to include an ATCUD code on their invoices from January 2022. However, the budget proposes suspending this requirement until 2023, making it voluntary up until then.

Although the ATCUD will not be mandatory in 2022, the tax authorities are giving businesses an incentive to implement it before then. Taxpayers will be able to deduct 120% of their expenses related to ATCUD implementation costs if they include the ATCUD on all invoices and relevant tax documents before 1 January 2023. 

3. B2G E-invoices

Portugal has been rolling out the e-invoicing mandate for business-to-government transactions since January 2021. To recap:

• For large enterprises, B2G electronic invoicing in Portugal has been mandatory since 1 January 2021
• For medium and small sized companies, the deadline for compliance was 1 July 2021.
• From January 2022, microenterprises and public entities will be obliged to issue e-invoices in public transactions.

To reduce stress and enable businesses to redirect resources to more urgent needs during the pandemic, Portugal established a grace period, which allowed the public authorities to accept PDF invoices instead of e-invoices.

However, this grace period will end on 31 December 2021, meaning businesses need to get their B2G e-invoicing systems up and running before then. 

If you’re having trouble wrapping your head around the latest invoice rules in Portugal, let us help. Avalara can offer you a frictionless approach to compliant invoicing — wherever you’re located.

Find out how you can future-proof your business with Avalara’s e-invoicing and live reporting solutions.