In 2019, new regulations in Portugal went into effect that require nearly all business invoices to be sent electronically; also known as e-invoicing, instead of on paper. So what does this mean? It means that you will no longer be able to send out paper invoices when doing business with Portuguese companies or individuals; but rather you will need to use software to create and send your invoices electronically. There has been a lot happening since 2019. Non-resident companies have been brought under e-invoicing requirements; deadlines have been pushed back due to Covid, and new regulations have been released. This blog article summarises the latest changes.
Are You Aware of the E-Invoicing Legislation?
Portugal recently introduced e-invoicing at the start of this year. This new regulation requires businesses to send invoices electronically. The main goal of this legislation is to reduce paper waste and improve efficiency. In order to comply with the new regulations, businesses must have a system in place that can generate and send e-invoices.
Not only will companies engaged in e-invoicing be required to maintain electronic archives; but companies that receive electronic invoices from suppliers will need to acquire the ability to store their electronic records as well.
Why Has this Happened?
To tackle the ‘hidden economy’, Portugal has been working on modernising invoicing for years! As a result of Covid’s delay, authorities were given much more time to develop an e-invoicing standard; so make sure you review all information about it to ensure you are now in compliance!
The tax authority found that e-invoicing offered benefits like the addition of a unique QR code to each invoice and also a chance to make their operations more efficient and less open to fraud.
What Does it Mean for Businesses?
The QR Code
The Portuguese government originally introduced QR codes on invoices in January 2021, but was forced to postpone the implementation due to the pandemic. QR codes are now required on all invoices, both printed and electronic.
The QR code should be at least 30x30mm and appear on the first page of the invoice.
QR codes are used for the purpose of structuring information in such a way that IT systems can process it efficiently. Each field will contain a code and description, for example: “A” = the issuer’s TIN (tax identification number). On the tax authority’s website, you can find technical specifications about adding QR codes to invoices.
The ATCUD code
ATCUD is a sequential number validation code that identifies invoices and confirms their validity.
As of January 2022, businesses were required to include an ATCUD code on their invoices until October 2021. The budget proposes suspending this requirement until 2023, making it voluntary.
The ATCUD is not critical for this year, 2022, but businesses are being invited to implement it before the deadline. Those who include the ATCUD on all invoices and tax documents before 1 January 2023 will be able to deduct 120% of their ATCUD implementation costs.
How Do I Comply?
We are here to help you with your trouble in understanding the recent new laws related to e-invoicing in Portugal. RHJ Accountants will provide you with the peace of mind that your invoices are completed in accordance with the standards required by Portuguese law, wherever you may be located.
How RHJ Accountants Can Help
We recognise more than ever that individuals and businesses from the UK and other countries may be globally mobile. We aim to make you aware of the tax-efficient opportunities, available tax relief and structure finances for life at home and abroad.
Our international team of specialists operate from offices in the UK and Portugal. We work together synergistically to provide tax efficient solutions to our clients to help them grow their business whilst keeping tax liabilities to a minimum.