Portugal’s new VAT grouping regime, effective from July 1 2026, introduces stricter eligibility criteria than other EU members, requiring a dominant entity to hold at least 75 % of share capital and 50 % of voting rights, and limiting participation to entities with a Portuguese head office that carry out deductible activities. The regime does not neutralise intra‑group supplies and may exclude financial and insurance groups with predominantly exempt activities.
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Portugal Resident · 14 days ago
Portugal's Social Democratic Party has proposed a legislative change that would retroactively apply a 6% VAT rate to urban rehabilitation works in designated Urban Rehabilitation Areas, regardless of whether an approved Urban Rehabilitation Operation exists. The measure would override the current tax authority interpretation that requires an approved operation, potentially allowing construction companies to challenge past assessments and recover overpaid VAT. If passed, the 6% rate would apply to projects carried out since 2008.
Meridian Global Services · 18 days ago
The CJEU ruled that year‑end transfer‑pricing adjustments are not automatically considered VAT‑relevant unless they are directly linked to a specific supply. The decision clarifies that only adjustments that represent additional consideration for a particular taxable transaction trigger VAT adjustments, and businesses must assess the economic and contractual context of each adjustment to determine VAT exposure.
Bloomberg Tax · 20 days ago
The Court of Justice of the European Union ruled on 13 May 2026 that transfer‑pricing adjustments do not automatically trigger VAT unless a direct link exists between an identifiable supply and the payment received. The decision clarifies that such adjustments may still be subject to VAT if they qualify as price adjustments affecting the taxable amount, and it requires companies to perform a case‑by‑case assessment of their intragroup agreements and documentation.
Bloomberg Law · 21 days ago
The Court of Justice of the European Union ruled that a transfer pricing adjustment does not automatically trigger VAT unless a direct link exists between an identifiable supply and the payment received. The decision underscores the need for companies to assess each adjustment case‑by‑case, draft clear intragroup agreements, and maintain robust documentation to secure the intended VAT treatment.
LinkedIn · about 1 month ago
The CJEU ruled that profit margin adjustments in transfer pricing mechanisms do not automatically constitute consideration for a VATable service. The ruling clarifies that such adjustments may be treated as retroactive purchase price adjustments if not remuneration for a service, affecting the taxable amount of the original supply. This decision provides guidance for intra‑group arrangements and the need for a direct link between services and consideration.
Bloomberg Tax · about 1 month ago
The EU Court ruled that Stellantis’s price adjustments with local dealers are not taxable services, meaning the automaker does not owe VAT on those adjustments. The case involved agreements between Stellantis’s Portuguese unit and dealers that included price adjustments based on dealers’ expenditures to ensure a fixed margin. Portugal’s tax authority had challenged the arrangement.
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Key Takeaways
It takes effect for tax periods starting on or after July 1, 2026.
It must hold at least 75% of share capital and more than 50% of voting rights in the dependent entities.
No, only entities with a head office or fixed establishment in Portugal may be included.
Yes, members must conduct activities that give rise to input VAT deduction; otherwise they may be excluded.
No, intra-group supplies are not neutralised; VAT may still apply to services supplied between group members.
Primary source
Read the full article at International Tax ReviewThis summary was published on VATfaqs.com on 23 June 2026. It relates to VAT developments in Portugal. The original source is International Tax Review.
