The changes to VAT approved in the final version of the State Budget for 2026 become a central theme for the beginning of next year, as they will modify rates applied to various products and extend tax benefits that were about to end. The measures result from the vote in the specialty and come into force on January 1st, after being promulgated by the President of the Republic.
The tax package approved by parliament introduces VAT reductions in specific sectors, extends existing exemptions and adjusts rules applicable to agricultural, cultural and animal support activities. From 2026 onwards, fertilizers, game meat, works sold in art galleries and the production of olive oil will become part of new tax frameworks, according to Notícias ao Minuto.
6 percent VAT on olive oil production
From January onwards, olive oil processing operations will be covered by the reduced rate of 6 percent, replacing the 23 percent currently applied. This change was foreseen in the Government’s original proposal and was included in list I attached to the VAT Code, which contains the goods and services subject to the reduced rate.
Olive oil and olive pomace already benefited from this tax, so the measure aligns the entire production chain.
Extended exemption for fertilizers
The VAT exemption applicable to the purchase of fertilizers, flour, cereals, soil improvers and seeds used in agricultural activity was also extended until December 31st of next year. This measure, created in 2022 to mitigate the impact of rising fuel prices, maintains the right to deduct the tax borne by farmers and will now last for more than four and a half years. The proposal was presented by the PSD and the CDS-PP.
Art galleries now benefit from the reduced rate
Sales of works in art galleries will be taxed with VAT of 6 percent from next year. Until now, the standard rate of 23 percent was the rule, with the reduced rate applied only when the sale was made by artists or rights holders, according to the same source.
The change stems from proposals from the PS and Chega and is part of the European directive that regulates the taxation of works of art, whose transposition into national law has not yet ensured this relief for galleries.
Game meat also has a different tax framework. VAT drops from 23 to 6 percent, matching other fresh and frozen meats already covered by the reduced rate.
The PSD and CDS-PP initiative highlights that a large part of the game meat slaughtered in Portugal is currently sent to Spain for processing and marketing, then returning to the Portuguese market as a final product. The objective, according to the source previously mentioned, is to stimulate the national sector and capture added value.
VAT exemption on pet food
The VAT exemption for the purchase of food by legally constituted zoophilic associations remains until December 31st of next year. The extension, proposed by the PAN, prolongs the regime created in 2022 in a phase of strong inflationary pressure. According to the party, the measure makes it possible to alleviate the burden on associations, helping them to direct resources towards food, care and sterilization, essential factors for reducing abandonment and controlling the animal population.
The changes approved in OE2026, according to , represent a broad set of adjustments to VAT that cover agricultural, cultural and social sectors. After promulgation, they will come into force at the beginning of next year, translating relevant changes for producers, associations and consumers.
Also read:
