Portugal B2G E-Invoicing Rules Take Effect in January – Reflecting a Larger Trend for Tax

Europe’s oldest country has become the newest European Union (EU) member to embrace electronic invoicing. While the rules currently apply only to business-to-government (B2G) transactions, recent shifts by other EU members, such as Italy, raise the question of whether Portugal will become the next EU country to move to much broader e-invoicing requirements for value added tax (VAT).

On 1 January 2019, companies that conduct transactions with Portugal’s public entities (at all levels: central, local, regional and enterprise) must submit their invoices electronically via the country’s new e-invoicing portal, the Fatura Eletrónica na Administração Pública (FE-AP). According to the new rule, this portal “will allow the centralisation of the vision of public administration providers in a single and collaborative portal, with functionalities to support the business processes of public entities and economic operators, guaranteeing the transparency and efficiency of means.”

Portugal’s move, although currently limited in scope to B2G transactions, reflects yet another example of the move toward electronic invoicing and real-time reporting occurring throughout Europe. More EU member states are requiring companies to digitally submit more tax data earlier in the process to combat tax revenue shortfalls due to VAT fraud and inaccuracy.

Many companies are also busily preparing to comply with new business-to-business and business-to-consumer e-invoicing requirements taking effect in Italy on 1 January 2019. It is worthwhile to keep in mind that when Italy issued its initial e-invoicing requirements, those rules (like Portugal’s new requirements) only applied to B2G transactions.

Tax functions should keep this broader digital submission trend in mind as they prepare to address the next compliance requirement on the horizon –we’ll continue to keep you posted as new information becomes available.