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- Tax, Live in Portugal
VAT in Portugal for Consumers: What It Is and the Rates You Pay
🧾 What Is VAT?
VAT is a tax on consumption. It’s added to the price of most goods and services and collected by businesses, which pass it on to the State.
- Consumers pay VAT as part of the price and can’t deduct it.
- Businesses and self-employed people charge VAT to their clients and generally deduct the VAT they pay on their own purchases.
In Portugal, prices shown to consumers must include VAT.
📊 The Rates
Portugal has three VAT rates, which are lower in the autonomous regions:
- Standard rate: 23% on the mainland, 22% in Madeira, 16% in the Azores
- Intermediate rate: 13% on the mainland, 12% in Madeira, 9% in the Azores
- Reduced rate: 6% on the mainland, 4% in Madeira, 4% in the Azores
🛒 What Falls Under Each Rate?
Some common examples (the full lists are in the VAT Code):
Reduced rate (6%):
- Most basic food (bread, milk, fruit, vegetables, fish, meat)
- Books, newspapers and magazines
- Medicines and many medical devices
- Water supply
- Passenger transport (trains, buses, taxis)
- Some construction works on homes (with conditions)
Intermediate rate (13%):
- Restaurant meals (food — alcoholic drinks, soft drinks and juices are generally at 23%)
- Wine
- Some canned goods and other food products
- Tickets for some cultural events
Standard rate (23%):
- Clothing, electronics, furniture, household goods
- Alcoholic drinks (other than wine) and soft drinks
- Telecommunications (internet, mobile phones)
- Most services (lawyers, accountants, repairs and others)
Electricity and gas have specific rules: part of the bill can benefit from a lower rate, depending on the contracted power and consumption.
🚫 Exempt Goods and Services
Some operations have no VAT, for example:
- Medical and hospital services
- Education
- Residential rents
- Most banking and insurance services
- The sale of used homes (subject to IMT and Stamp Duty instead)
💶 Getting Some VAT Back in Your IRS
If you ask for an invoice with your NIF, you can get back 15% of the VAT paid on certain expenses, up to €250 per household, as an IRS deduction:
- Car and motorbike repairs
- Restaurants and accommodation
- Hairdressers and beauty salons
- Vets
- Gyms
- Monthly public transport passes (100% of the VAT)
The invoices must be confirmed on the e-Fatura portal.
📦 Buying Online from Outside the EU
Since July 2021, all goods imported into the EU are subject to VAT, regardless of value. When you buy from a non-EU website (for example, in the UK, the US or China), you may pay VAT at checkout or on delivery — often with a handling fee from the courier.
❓ Do I Need to Do Anything?
As a consumer, no — VAT is included in the price. You only need to think about registering for VAT if you start a business or self-employed activity.
💡 Practical Tips
- Always ask for your NIF on invoices — it counts for IRS deductions.
- Check e-Fatura every year before the deadline and confirm pending invoices.
- Compare prices with VAT included — shops must show the final price.
- Moving to Madeira or the Azores? Lower VAT rates make many purchases cheaper.
🚀 Final Considerations
VAT is part of everyday life in Portugal. As a consumer, you don’t have to file anything — but asking for your NIF on invoices and checking e-Fatura can put some of that VAT back in your pocket.
📢 Expert Advice: Make a habit of giving your NIF at restaurants, garages and hairdressers. The VAT deduction is small, but it adds up every year.
Need help with your IRS deductions in Portugal? Step Inside Portugal’s tax team can review your e-Fatura and prepare your IRS return — find out more about our tax services here. ✨
This article is for general information only and doesn’t constitute tax advice. Rates as of October 2026; the State Budget can change them.
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