The SB Proposal does not greatly amend the VAT Code, only streamlining the VAT regularization framework and introducing an additional deduction for plug-in electric or hybrid cars.

The VAT rate applicable to tickets to the zoo, botanical gardens, public aquaria and museums was reduced and the VAT rate for bullfighting events was increased.



The SB Proposal amends the framework for regularizing VAT on bad or irrecoverable debt.

According to the SB Proposal, taxable persons are now able to deduct the tax pertaining to bad debt if the default exceeds 12 months from their due date, subject to the other conditions provided for by law. This above period is currently 24 months.
The SB Proposal further reduces from 8 to 4 months the deadline for the tax authority to assess the prior authorization application filed by any taxable person to deduct the tax associated with bad debt.

Lastly, the information required to regularize the tax can now be certified by a certified independent accountant if it does not exceed EUR 10,000 per periodical tax return. Above this threshold, the information still needs to be certified by a statutory auditor.


VAT Deduction of expenses with electrical vehicles

The SB Proposal stipulates the possibility to deduct VAT included in expenses pertaining to the power used in electrical or plug-in hybrid vehicles.



The SB Proposal applies a reduced VAT rate to treated wastewater, which is now included under the item for water in List I attached to the VAT Code.

The reduced VAT rate is further applicable to tickets for zoos, botanical gardens and public aquaria, if they are not already VAT-exempt.

The reduced VAT rate also applies to provisions of guided or not guided visit services to buildings classified as national, public or municipal interest buildings and to museums as defined in the Portuguese Museums Framework Act, except if those are for-profit organizations, provided that they are not already VAT-exempt.

Conversely, bullfighting events will be taxed at the regular VAT rate and will no longer benefit from the reduced rate.


VAT Refund

The SB Proposal extends the VAT refund benefit to non-profit entities of the national science and technology system and the Instituto da Conservação da Natureza e das Florestas (Institute for the Conservation of Nature and Forests) (ICNF, I.P.).


Enabling acts

The enabling act set forth in the previous (2017, 2018 and 2019) SB Laws is renewed to extend the application of the restaurant sector’s intermediate rate to other drinks’ services, including some previously excluded drinks.

The SB Proposal also sets forth an enabling act authorizing the application of the reduced rate to certain products, aids and support devices exclusively used by disabled and temporarily disabled persons.

The SB Proposal further authorizes the Government to create power consumption brackets based on the hired power structure existing in the market, applying the reduced or intermediate VAT rate to power supplies pertaining to hired low-consumption power.