VAT Calculator
Enter your base amount, pick a VAT rate, and optionally add withheld tax to see the full invoice breakdown instantly.
Parameters
e.g. most goods and services including professional services, software, and general commerce.
Withheld tax (retenção na fonte)
Withheld income tax advance
Results
Disclaimer: This calculator is provided for indicative purposes only and does not constitute tax or financial advice. VAT rates and withholding rules may vary by region, transaction type, and applicable exemptions. Always verify the applicable rates with a qualified accountant or the tax authority (AT).
What is VAT?
VAT (Value Added Tax) is a consumption tax applied to most goods and services at each stage of production and sale. In Portugal, it is called IVA (Imposto sobre o Valor Acrescentado). As a business or freelancer, you collect VAT from clients on behalf of the state and periodically remit it to the tax authority (AT).
The VAT you charge is not part of your income — it passes through your hands. Your actual earnings are the base amount before VAT. If you are VAT-exempt (isenção de IVA under article 53 of the CIVA), you do not charge VAT at all, which can lower your prices but means you cannot recover VAT paid on your own purchases.
VAT rates in Portugal (mainland)
- 0% — Exempt (isento) — Certain goods and services are fully exempt, such as newspapers and periodicals, specific social and healthcare services, and some exports. Exempt taxpayers do not charge VAT and cannot deduct input VAT.
- 6% — Reduced rate (taxa reduzida) — Applied to basic food essentials, books and educational materials, non-prescription medicines, hotel accommodation, and public passenger transport. Azores: 4%, Madeira: 5%.
- 13% — Intermediate rate (taxa intermédia) — Applied to items such as wine, olive oil, certain food products, restaurant services (on mainland Portugal), and some cultural events. Azores: 9%, Madeira: 12%.
- 23% — Standard rate (taxa normal) — The default rate applied to the vast majority of goods and services, including professional services, software, electronics, clothing, and general commerce. Azores: 16%, Madeira: 22%.
What is withheld tax (retenção na fonte)?
Withheld tax (retenção na fonte) is an advance payment of IRS (personal income tax) deducted directly by your client at the time of payment. The client pays you less than the invoice total and transfers the withheld amount to the state on your behalf. It is not an extra cost — it is an advance on your annual IRS bill, credited when you file your tax return.
- 11.5% — Freelancers (recibos verdes) — The standard rate for most independent professionals issuing green receipts in Portugal. Applies to income under Category B of IRS.
- 16.5% — Commercial agents and commissions — Applied to income earned by commercial agents and commission intermediaries as defined in the IRS Code.
- 20% — Non-habitual residents (NHR) — Flat withholding rate for qualifying professionals registered under the former NHR tax regime, for high-value activities.
- 25% — Non-residents — Default withholding rate applied to payments made to non-residents providing services in Portugal, unless a tax treaty provides a lower rate.