Do-foreign-client-sales-count-toward-Portugals-E15-000-VAT-exemption

(Spoiler: services supplied abroad don’t—goods shipped from Portugal now do)

With the new VAT rules that were introduced by the Portuguese Tax Authority in July 2025, we’ve been receiving a lot of questions.  A recurring question is: Are sales outside of Portugal counted towards the new VAT Exemption limit?

Why this matters in 2025 – 26

From 1 July 2025 Portugal’s revamped VAT rules keep most micro-businesses VAT-free—but only if their Portuguese-located turnover stays at or below €15 000 during the calendar year.

Knowing which foreign sales inflate that turnover can decide whether you remain exempt or must register for VAT on 1 January 2026.

1. Services vs. goods—two totally different rules

Type of sale Where the transaction is “located” Portuguese VAT to charge Does it count toward the €15 000 limit?
B2B services to a client established outside Portugal (e.g. web design for a German GmbH)
Outside Portugal under the general place-of-supply rule (reverse charge, invoice code M40)
0 %
No – ignored for the threshold
Digital or professional services consumed in Portugal (e.g. photography at a Lisbon wedding)
Portugal
Depends on whether you’re VAT-registered
Yes
Goods held in Portuguese stock and shipped abroad (exports or intra-EU supplies)
Portugal (article 14/15) even though rate is 0 %
0 % (zero-rated export or intra-EU supply)
Yes – new in 2025
Goods never entering Portugal (drop-shipping from a Spanish warehouse)
Outside Portugal
No PT VAT
No

2. Real-world examples (using 2025 figures)

2025 revenue split Do you breach €15 000? Consequence
€12 000 Portuguese design work + €22 000 to UK clients (reverse charge)
No – only €12 000 counts
Stay exempt for 2025; review again in Jan 2026
€10 000 Portuguese coaching + €9 000 Portuguese exempt health-care + €20 000 German clients
Yes – domestic turnover €19 000 (health-care now counts)
File alteration by mid-Jan 2026; VAT from 1 Jan 2026
€14 500 exports of wine from Porto warehouse + €1 000 local tasting tours
Yes – exports are zero-rated but located in PT → total €15 500
Same: register in Jan 2026
€18 900 PT turnover reached on 3 October 2025 (local café)
Breach during the year
Charge VAT on the 3 Oct receipt; declare within 15 working days
€25 000 drop-shipped electronics from a Dutch warehouse; No PT clients
No – goods never located in Portugal
Remain exempt; keep M40-style documentation to prove location

3. How to prove a sale is outside Portugal

  1. Services – collect the customer’s VAT or tax ID, contract, and evidence of business use (for B2B).

  2. Goods – keep transport documents showing the products left Portugal, or stock ledgers proving the goods were held abroad at the time of sale.

  3. Invoices – use two series: M40 for reverse-charge services / non-PT goods, M10 for exempt domestic sales.


Have you registered for VAT in Portugal? Know all about “When do I have to register for  VAT in Portugal in 2025?”

4. Action checklist before year-end

  • Watch exempt exports—their zero rate no longer protects your exemption status.
  • Budget cash-flow: passing €18 750 mid-year means VAT due on that very invoice.


Based exclusively on the OCC “Guia Prático – Regime Especial de Isenção do IVA” (July 2025). Information is general; always seek professional advice for your specific facts.

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