Value Added Tax (VAT)

Understand more about the VAT rates in Portugal…

Value added tax (Imposto sobre o Valor Acrescentado - IVA) is paid at the time of purchase of a product or service. It is paid by everyone and there is no distinction between residents and non-residents. There are three levels of VAT for mainland Portugal, Madeira and Azores.

VAT rates

There are different rates of VAT due for different goods and services. These rates are:

  1. IVA geral (general): Charged on prepared food, non-essential products and services. Also on solar/alternative energy equipment, agriculture machines, electricity and natural gas, fire prevention and fire fighting equipment, lawyers, solicitors and legal representatives at a rate of 23 percent; in Madeira the rate is 22 percent, in Azores 16 percent.
  2. IVA intermedio (intermediate): Charged on bottled spring and mineral water.  Theatre, cinema and tickets for entertainment. Fuel and oils used for heating, fishing, agricultural machines. Household services by a third party (electricians, plumbers, housekeepers, etc. ) at a rate of 13 percent; in Madeira the intermediate VAT rate is 12 percent, in Azores 9 percent. For a list of items subject to intermediate VAT visit: Tax and Customs Authority (in Portuguese).
  3. IVA reduzido (reduced): Charged on non-processed food (fresh meats, fresh fish, bird eggs, etc.) and non-processed packaged foods, lodgings and at 6 percent; in Madeira at 5 percent and Azores at 4 percent. For a list of items subject to reduced VAT visit: Tax and Customs Authority (in Portuguese).