Electronic invoice in Portugal

In Portugal, electronic invoicing (Fatura Eletrónica) is an important part of the national tax system and is supported by various legal regulations at both the national and European levels. Electronic invoicing has been widely implemented in Portugal to improve tax administration, simplify compliance with tax regulations, and prevent tax evasion. Below are the key legal foundations for electronic invoicing in Portugal:

1. Portuguese VAT Law (Código do Imposto sobre o Valor Acrescentado – CIVA)

The Portuguese VAT law (CIVA) provides the basis for the invoicing regulations and the tax recognition of electronic invoices.

• Article 36 of CIVA regulates the general requirements for invoices, stating that an invoice must always be issued when goods are delivered or services are provided.
• Article 41 of CIVA defines the requirements for electronic invoicing, making it clear that electronic invoices have the same legal status as paper invoices, provided they meet the requirements for authenticity and integrity of the content.

2. Decreto-Lei n.º 28/2019

Decreto-Lei n.º 28/2019 is a crucial law that regulates the introduction and requirements for electronic invoicing in Portugal. It ensures that all invoices sent by businesses to public administration (B2G) must be transmitted in electronic form.

• Since 2019, all public institutions have been required to accept electronic invoices submitted through the e-fatura system (the platform of the Portuguese tax authority, Autoridade Tributária e Aduaneira – AT).
• Starting in 2021, the system was expanded, and private companies collaborating with public administration are also required to use electronic invoices.

3. e-fatura System (Fatura Eletrónica)

The e-fatura system is the central platform of the Portuguese tax authority (AT), through which electronic invoices are submitted, validated, and archived. The system aims to promote tax compliance and prevent tax evasion by making the exchange of invoices transparent.

• Electronic invoices must be submitted in XML format through the e-fatura system. The system allows invoices to be submitted directly, validated, and stored.
• Voluntary use: Since 2019, electronic invoicing has been mandatory for the B2G sector (Business-to-Government). From 2021, the requirements expanded, and the e-fatura platform also became relevant for the B2B sector (Business-to-Business), especially for multinational companies and businesses that execute public contracts.

4. EU Directive 2014/55/EU

Portugal has fully implemented EU Directive 2014/55/EU on electronic invoicing in the public sector. This directive obliges all EU member states to develop a system for electronic invoicing in public procurement and contracts.

• Peppol Standard: The e-fatura system uses the international Peppol standard (Pan-European Public Procurement OnLine) for electronic invoicing in the public sector. This standard facilitates the secure and standardized exchange of invoice data in Europe.

5. VAT Regulations (CIVA) and Archiving Requirements

In addition to the general requirements for the creation and submission of electronic invoices, the Portuguese VAT law also sets out regulations for the archiving of electronic invoices:

• Archiving obligation: Electronic invoices must be kept for at least 10 years, with the integrity and readability of the invoices ensured.
• The archiving must be done in a way that ensures invoices are accessible for tax audits at any time and stored in an immutable and readable form.

6. Use of Electronic Signatures

The authenticity and integrity of electronic invoices must be ensured under Portuguese law. An electronic signature can be used to guarantee the authenticity of the invoice:

• Electronic signatures are particularly important to ensure that the electronic invoice remains unchanged and that the issuer can be clearly identified. These signatures can be either qualified electronic signatures (QES) or other security mechanisms that meet legal requirements.

7. Penalties for Non-Compliance

Businesses that violate the electronic invoicing regulations, particularly regarding submission through the e-fatura system and the archiving of invoices, can be fined by the Portuguese tax authority. Possible penalties include:

• Fines for non-compliance with the obligation to submit electronic invoices or for insufficient archiving.
• Delays in the submission of electronic invoices can also lead to fines.

8. Extensions and Future Developments

It is expected that Portugal will continue to invest in the digitalization of tax declarations and invoicing in the coming years. This may include the introduction of additional automated tax reporting and e-invoicing requirements aimed at increasing tax transparency and improving tax collection.

Summary of Key Legal Foundations in Portugal:

• Portuguese VAT Law (CIVA): Electronic invoices are tax-recognized if they meet the requirements for authenticity and integrity.
• Decreto-Lei n.º 28/2019: Mandatory electronic invoicing in the B2G sector and for companies executing public contracts.
• e-fatura System: Platform of the Portuguese tax authority (AT) for submitting, validating, and archiving electronic invoices.
• EU Directive 2014/55/EU: Implementation of EU requirements for electronic invoicing in the public sector, using the Peppol standard.
• Archiving Requirements: Electronic invoices must be archived for at least 10 years.
• Electronic Signatures: To ensure the authenticity and integrity of electronic invoices.
• Penalties for Non-Compliance: Fines for violations of the electronic invoicing requirements.

Conclusion:

In Portugal, electronic invoicing is well-regulated through the e-fatura system and Decreto-Lei n.º 28/2019. Since 2019, electronic invoicing has been mandatory for all businesses working with public administration. Other businesses executing public contracts must also use electronic invoicing. The Peppol standard plays a central role in standardizing the system, especially in the public sector. Compliance with archiving and signature requirements is crucial to avoid legal and tax issues.