Value Added Tax (VAT) will change in 2026. The new law, already published in Diário da República, introduces a VAT group regime that will change the way companies calculate, declare and offset the tax between themselves. Although the measure is aimed at the business sector, its effects may reach the end consumer indirectly, namely through the way companies manage costs, returns and prices.
According to the diploma approved by the Assembly of the Republic, the new model will allow economic groups with several companies to consolidate their VAT balances, combining in a single calculation the tax payable to the State and the amount to be recovered. The objective is to simplify tax processes, reduce bureaucracy and bring Portugal closer to practices applied in other European Union countries.
What changes with the new regime
According to the document, companies linked by financial, economic and organizational ties may join the regime, as long as they meet criteria defined by the Tax and Customs Authority (AT). The “dominant” entity, usually the parent company, will be responsible for submitting a single group declaration, bringing together information from all included companies.
In practice, the VAT owed by a company may be offset against the VAT to be recovered by another company in the same group. This consolidation will allow business groups to have greater flexibility in treasury management, as the tax will no longer be calculated separately in each company.
Impact on companies and potential impact on consumers
Although the change appears restricted to the business sector, its impact may be indirectly reflected in prices and VAT refund deadlines. With the new structure, it is expected that groups will be able to balance internal accounts more efficiently and reduce delays in tax returns.
This stability can translate into less financial pressure on companies, which, in the medium term, helps to contain operating costs and avoid price increases for the end consumer.
According to the Government, the measure follows “the experience acquired in the taxation of corporate groups under IRC” and the recommendations of the Large Taxpayers Forum, a space for dialogue between AT and the largest Portuguese companies.
When it comes into force
The regime formally came into force on Tuesday, but will only take effect “from tax periods beginning on July 1, 2026”. Until then, companies will have to adapt to the new rules, adjust IT systems and prepare accounting teams for the new reporting model.
The proposal was approved on October 17, with favorable votes from PSD, CDS-PP, Chega and Initiative Liberal, and abstention from PS, Livre, PAN and JPP. The PCP and the Left Bloc voted against. The diploma was promulgated on the same day by the President of the Republic, Marcelo Rebelo de Sousa, and immediately published in the Diário da República.
A reform with European ambition
The new VAT group regime brings Portugal closer to the tax rules already applied in several Member States. The consolidation of tax balances between companies within the same group is seen as a way of simplifying tax collection and reducing tax disputes, making the system more efficient and predictable.
In practice, the change represents a behind-the-scenes reform with an indirect impact on daily economic life. Even if the average person doesn’t notice an immediate difference, it is a restructuring that can influence the way companies operate and, ultimately, how prices are formed.
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