IVA — Imposto sobre o Valor Acrescentado (VAT)

IVA (Imposto sobre o Valor Acrescentado) is Portugal's value-added tax, equivalent to UK VAT or US sales tax. The standard rate is 23% (mainland Portugal), with reduced rates of 13% (restaurants, wine) and 6% (essential foods, pharmaceuticals, cultural events, social services). The Madeira and Azores autonomous regions have lower rates. For self-employed professionals (Category B), VAT registration is mandatory when annual turnover exceeds €15,000. Below this threshold, the activity exemption (isenção) under Art. 53 CIVA applies — the taxpayer charges no VAT but also cannot reclaim input VAT. Tax consultants, doctors, healthcare professionals, and educators are typically exempt regardless of turnover under Art. 9 CIVA. VAT returns are filed monthly (large businesses) or quarterly.