Invoicing foreign clients from Portugal: VAT, reverse charge and what to write on invoices

The typical expat freelancer in Portugal has a client list that looks nothing like the typical Portuguese one: a startup in Berlin, an agency in London, a company in New York. Which raises the immediate practical question — do I charge Portuguese VAT to these clients, and what on earth do I write on the invoice?

The rules come from the EU's place-of-supply system, and once decoded they are surprisingly mechanical. For most service freelancers, the punchline is pleasant: you usually do not charge Portuguese VAT to foreign business clients — but you do have wording and reporting obligations that must be exactly right. Here is the map.

The key question: where is the service "supplied"?

VAT (in Portuguese, IVA) is charged where a service is deemed to take place, and for services the general rules are:

• B2B (business client): the service is supplied where the client is established. A Portuguese freelancer billing a German company supplies the service, for VAT purposes, in Germany — so no Portuguese VAT;
• B2C (private consumer): the service is supplied where the supplier is — so Portuguese VAT applies (23% standard rate on the mainland, unless a reduced rate or your Article 53 small-business exemption applies).

There are exceptions (services connected to real estate, events, and a special regime for digital services to consumers), but the B2B general rule covers the overwhelming majority of freelance consulting, development, design and marketing work.

EU business clients: the reverse charge

When your client is a VAT-registered business in another EU country, the reverse charge mechanism applies: you issue the invoice without VAT, and the client self-assesses VAT in their own country. Your responsibilities:

• Verify the client's VAT number in VIES (the EU's VAT number validation system) and keep evidence of the check — a valid number is what makes them a "business" for these rules;
• Make sure your own VAT number is registered for cross-border transactions (VIES) — this is requested when opening atividade or later via a declaration of alterations;
• Put the required mention on the invoice (wording below);
• File the recapitulative statement (declaração recapitulativa) — a listing of your intra-EU B2B services, submitted by the 20th of the month following each month/quarter in which you issued such invoices. This applies even if you are under the Article 53 VAT exemption for domestic purposes.

Tip: The recapitulative statement is the obligation exempt freelancers most often miss — Article 53 removes periodic VAT returns, not this declaration. Missing it triggers automated notifications from Finanças (the tax office), because your client's country reports the mirror-image data.

Non-EU business clients: outside the scope

For business clients in the UK, US, Switzerland or anywhere outside the EU, the same B2B logic places the supply outside Portugal — no Portuguese VAT, and no recapitulative statement either (that is an intra-EU instrument). You should still keep evidence that the client is a business (contracts, tax IDs, company registration), and be aware the client's country might have its own rules about imported services — usually the client's problem, not yours.

What to actually write on the invoice

Portuguese invoices must be issued through the Portal das Finanças (as faturas or faturas-recibo — the classic recibos verdes) or through certified invoicing software. Every invoice needs your details and NIF, the client's name, address and tax/VAT number, a description, date and value. For the VAT treatment, the standard mentions are:

The tax portal presents these options as dropdown choices when you issue the document — the challenge is knowing which to pick, and picking consistently.

Currencies, platforms and other practicalities

• Foreign currency: you can agree prices in USD or GBP, but Portuguese reporting runs in euros — the invoice must show the euro value/exchange reference, and your declarations use EUR amounts;
• Platforms (Upwork and similar): income through marketplaces is still your income to invoice and declare; platform fees and the platform's own VAT treatment add wrinkles worth reviewing once, properly;
• Digital services to EU consumers (apps, courses, downloads sold B2C across the EU) have a special regime — VAT is due in each consumer's country, manageable via the OSS one-stop shop rather than registering everywhere;
• Every payment received needs an official document issued — sending your own PDF invoice for the client's convenience is fine, but it does not replace the portal-issued document.

Tip: Set up one correct "template" decision per client type — Portuguese, EU business, non-EU business — with your accountant, then repeat it. Nearly all invoicing errors are one wrong dropdown choice, repeated fifty times.

Key takeaways

For freelancers in Portugal billing abroad, the pattern is stable: EU business clients get invoices without VAT under the reverse charge (with VIES validation and monthly recapitulative statements), non-EU business clients are outside the scope of Portuguese VAT, and consumers generally pay Portuguese VAT unless a special regime applies. The mentions on the invoice are not decorative — they are legal requirements that Finanças cross-checks against EU data.

Get the classification right once for each client type and the system runs itself. If your client mix includes platforms, consumers abroad, or anything beyond plain B2B services, a one-off review of your invoicing setup is a small investment against a very tedious class of problems.