The Diário da República recently published three new diplomas that introduce significant changes to the added value tax rules (VAT) in Portugal. These measures will have a direct impact on small businesses, art market and digital services.
More companies can join the cash accounting regime
Decree-Law No. 34/2025 substantially extends the maximum limit of the annual business volume for access to the VAT cash accounting regime.
Now, companies with revenues up to two million euros a year (previously only 500 thousand euros) can benefit from this regime, which allows you to improve financial management and treasury flow.
New rules for cultural and artistic goods
Decree-Law No. 33/2025 partially implements the transposition of Directive (EU) 2022/542, modifying the special regime applicable to the sale of secondhand goods, art objects, collection and antiquities.
Among the news is the taxation of the benefits of cultural, artistic, educational or similar services performed virtually.
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These are now taxed in the country where the recipient has a habitual thirst or residence, with an exception to ensure effective taxation in places where real consumption occurs.
Another significant change is the possibility of applying a reduced rate of 6% in these transactions, a measure long awaited by artists and gallery owners.
Simplified exemption for small businesses
Finally, Decree-Law No. 35/2025 introduces important news for small businesses, partially transposing directives (EU) 2020/285 and 2022/542.
From now on, companies with revenues up to 15,000 euros can opt for the special VAT exemption regime even if they maintain organized accounting.
In addition, administrative proceedings such as the exemption of the VAT’s recapitulative declaration are simplified, allowing the exclusive issuance of simplified invoices and facilitating access to exemption regimes in other Member States up to 100,000 euros, upon specific prior registration.
These changes to VAT rules aim to facilitate tax compliance, reduce administrative charges and boost companies growth.
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