Portugal is to enable importers to avoid the cash payment of import VAT by introducing deferred VAT from 1 March 2018. Traders will be able to report the import through their Portuguese VAT return and reclaim relief at the same time – thus removing the need for any payment. This is known as the reverse charge.
Currently, importers have to either pay VAT on clearing the goods into free circulation, or provide a bank guarantee to the tax office for up to 100% of the import VAT. This leaves Portugal at a competitive disadvantage for its import and freight trade since many other EU states no longer require this.
The new Portuguese postponed accounting procedure will require businesses to file VAT returns on a monthly basis. They must also have a clean recent VAT compliance history.
EU Postponed VAT Accounting
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