Electric Invoicing is mandatory in the Business to the Government sector in Portugal. State and public authorities have to use eSPap’s platform to receive invoices. Vendors must use UBL 2.1 CIUS-PT or CEFACT CIUS-PT to send signed e-invoices.
Portugal is developing its electronic invoicing system mandate like other European countries. The Portuguese Government aims to reduce tax fraud and close the difference between the collected and expected VAT revenue. New rules and regulations concerning Business to Government e-invoicing are now in place.
In this article, you will understand e-invoicing and if it's mandatory in Portugal. You will also learn Portugal's e-invoice requirements and how to exchange and process e-invoices in public procurement.
Let’s dive in.
What is e-invoicing in Portugal?
Electronic invoicing in Portugal is a tax clearance model by the government. The tax clearance model allows continuous transaction controls (CTC). Tax authorities can decrease the VAT gap and stop tax evasion through real-time digital control of transactions.
The “Entidade de Serviços Partilhados da Administração Pública I.P.” or “eSPap” is the government entity responsible for implementing electronic invoicing. The entity sets up and maintains the public procurement e-invoicing system. Additionally, this entity publishes technical and functional requirements.
In 2014, Portugal started digitizing its administrative procedures. Companies were required by the Portuguese tax and border authority to declare their VAT online and transfer transport authorizations before moving merchandise. In 2019, Portugal adopted e-invoices in the public sector to follow standard regulations in all European Union countries.
The Decree-Law no. 111-B/2017, approved on 31st August 2017, regulates e-invoicing in Portugal. E-invoicing is amended Decree 123/2018, which shows characteristics of the system and other deadlines.
E-invoicing in Portugal has many benefits for organizations such as:
- Decreases use of paper
- Automates routine processes
- Eases complex tasks
- Decreases the resources used in business process including time and money
Is e-invoicing mandatory?
E-invoicing is not mandatory in the Business to Consumer(B2C) and Business to Business (B2B) sectors. However, e-invoicing became mandatory in the Business to Government (B2G) sector by the end of 2021.
The European Directive 2014/55/EU decrees that invoicing public administrations should be regulated. Large suppliers were required to issue and send invoices to all public organizations via electronic forms by the end of 2021. The obligation expanded to the medium, small, and micro-enterprises in 2021.
The compliance deadline for e-invoicing was the following:
- Large enterprises- Business to Government (B2G) electronic invoicing in Portugal was mandatory as of 1st January 2021
- Small and medium- B2G e-invoicing became mandatory as of 1st July 2021
- Non-established businesses- mandatory B2G e-invoicing was postponed to 1 July 2021
- micro-enterprises and public entities- they were required to issue e-invoices in public transactions from January 2022
The eSPap classifies enterprises using employee number, balance sheet volume, and turnover. The classifications go the following way:
- Large enterprise has over 250 people, earns over 50 million euros in a year, and the balance sheet totals 43 million euros in a year.
- Medium-sized enterprise has less than 250 employees, earns 50 million euros or less, and the total yearly balance sheet is 43 million euros or less.
- Small enterprise has less than 50 people, and their total yearly turnover or balance sheet is 10 million euros or less.
- Microenterprise has below ten employees, and its yearly turnover or balance sheet is 2 million euros or less.
Portugal electronic invoice requirements for public procurement processes?
State and public authorities have to use eSPap’s platform to receive invoices. Other independent bodies can use other platforms as long as they follow eSPap standards. Vendors must use UBL 2.1 CIUS-PT and CEFACT CIUS-PT to send signed e-invoices.
The eSPap sets up and maintains the e-invoicing system in Portugal. It developed an e-invoicing portal known as FE-AP (Fatura Eletrónica na Administração Pública), which all state and public authorities with direct management service must use to receive invoices.
The state bodies and public entities which receive e-invoices via eSPap include IAPMEI, INEM, IPDJ, ISS, or eSPap.
Still, independent administrative bodies, Autonomous regions, Bank of Regions, and public foundations can use other portals. Vendors must consult their entities on which portal they use.
Non-official suppliers of e-invoicing services came up with platforms to issue and receive e-invoices.
The platforms must comply with eSPap standards for suppliers and public entities. Additionally, the platforms must align with VAT requirements and cross-border e-invoicing while providing electronic data interchange (EDI).
The Portuguese tax authority certifies the platforms as e-invoicing applications that comply with eSPap standards.
E-invoice Requirements Portugal
Each e-invoice must have the following:
- Unique invoice identifier (transmission date, company information, and recipient)
- QR code as of 1st January 2022
- ATCUD as of January 1st, 2023
- An electronic signature in electronic invoices in PDF format to ensure they are valid as from 1st July 2022.
Companies should have a system that verifies the signature’s validity as of July 31, 2022. The Autoridade Tributária e Aduanera (AT) must certify a system or software solution for companies to add the ATCUD and the QR code.
ATCUD is a unique ID number in an invoice and is a fragment of the information of the QR code.
The ATCUD number has the following format; ATCUD: Validation Code-Sequential number.
Taxpayers get the first part of the ATCUD (validation code) by communicating the document series to the AT. The taxpayer must also give other items such as type of document and first document number of the series.
Afterward, AT delivers a validation code that is valid for at least a fiscal year for the whole document series. The sequential number (second part of the ATCUD) is the number that follows within the document series.
How to exchange and process e-invoices for public procurement
There is a process you need to follow to create and transfer e-invoices.
Here are the steps:
- Ensure e-invoices are in CIUS PT, UBL 2.1, or another European Norm-compatible format after agreeing with the Public Authority.
- Get an e-invoicing software to comply with the requirements.
- Connect to FE-AP (eSPap’s portal) to receive and transfer e-invoices, entities, and suppliers.
- Transfer the e-invoices via a web service/secure online connection (you can’t send through email)
The eSPap supports during the registration, test, and go-live processes. You can also monitor the e-invoices status sent to the FE-AP solution.
eProcurement made easy with Storecove
The eSPap is responsible for maintaining e-invoicing in Portugal. Portugal e-invoicing is mandatory in the B2G sector but not B2C and B2B sectors.
State and public authorities with direct management services must use eSPap’s platform (FE-AP) to receive invoices. However, other bodies can use other platforms to issue and receive e-invoices as long as they comply with eSPap standards. They must transfer e-invoices using the UBL 2.1 “CIUS-PT” or CEFACT “CIUS-PT” format.
Are you looking for an e-invoicing solution?
Storecove helps you connect to international e-invoicing networks. We support nearly all e-invoicing formats and help you comply with all European e-invoicing regulations.
Here are a few examples of how we can help you:
- We automatically generate your invoice in the format needed by the recipient. All you have to do is connect with one data format, such as UBL.
- We connect your business to international e-invoicing networks, such as FE-AP, Peppol, SAP Ariba, and SDI.
- Your company can send e-invoices to national tax authorities, such as GST (India) and SDI (Italy).
- We ensure you receive invoice responses after sending them (such as paid and authorized)
Call us on: +31 (0) 20 261 17 91 or send an e-mail to: email@example.com
More information on Peppol in Portugal?
Call us on: +31 (0) 20 261 17 91 or send an e-mail to: firstname.lastname@example.org