Get a head start: Be Prepared for New Changes to Portugal’s E-Invoicing Requirements.

Starting January 2025, new changes will come into play in Portugal’s e-invoicing regulations:

• Starting from 1 January 2025, a new regulation will come into effect regarding Portuguese invoices. According to this regulation, all invoices issued in PDF format must include a digital signature to be considered valid, along with the already live QR code requirement. This new requirement is aimed at ensuring the authenticity and integrity of electronic invoices. As a result, the implementation of qualified electronic signatures or seals along with electronic data interchange (EDI) systems will become mandatory.

This regulatory change is significant as it will bolster the security and reliability of electronic invoices, providing added assurance to businesses and stakeholders involved in electronic transactions.

• In addition to this, another requirement for small and micro-enterprises will come into effect as of 1 January 2025. They will be mandated to comply with the B2G (business-to-government) electronic invoice system. This shift towards electronic invoicing reflects the ongoing digital transformation within the business landscape and is designed to streamline processes and enhance efficiency in interactions between businesses and government entities.

These changes were set to take effect earlier this year, but the Portuguese 2024 Budget Law has postponed both requirements to 2025.

Looking ahead to 1 January 2026, businesses will also be obligated to declare the SAF-T accounting file electronically. This requirement will further integrate digital processes into business operations, ensuring that accounting data is accurately and efficiently reported to the Tax and Customs Authority. These upcoming changes highlight the importance for businesses to stay informed and prepared to ensure seamless transitions and continued compliance.

More information regarding the upcoming changes can be found on the Public Administration Shared Services Entity (ESPAP) website.

Is your business ready for these changes? If you have any questions or need guidance to prepare your business, we at eezi are here to help.

Background of e-invoicing in Portugal and invoicing Requirements in Portugal

The implementation of electronic invoicing in Portugal is not a recent development. In fact, the Portuguese government has been actively working on establishing an e-invoicing system since 18 April 2020 in accordance with Directive 2014/55/EU of the European Parliament. This system is managed by the Portuguese tax authority, known as the Autoridade Tributaria e Aduaneira. The ultimate objective is to require all taxable individuals who are residents and VAT-registered in Portugal to issue invoices and other crucial tax documents using exclusively certified electronic invoicing systems.

At present, electronic invoicing is mandatory only for transactions between taxable individuals and the public sector (B2G), while it remains optional for transactions between businesses (B2B) or between businesses and consumers (B2C). Large businesses were mandated to issue electronic invoices for transactions with public entities starting in 2021. The mandate is governed by Decree-Law 111-B/2017, which was enacted on 31st August 2017 and specifically regulates electronic invoicing for B2G transactions.

This legislation not only details the rules for issuing, sending, and receiving electronic invoices but also includes a phased plan to assist businesses in adapting to these new requirements. This phased approach is designed to ensure a smooth transition and minimize disruptions for businesses as they integrate electronic invoicing into their operations.

However, it is important to note that any business with a turnover of more than EUR 50,000 in the last year, must only make use of certified invoicing software when issuing invoices to recipients. Neither B2B nor B2C transactions are out of the scope of this strict requirement.  The software must be able to support electronic data interchange, allowing for the standardized exchange of business documents, such as invoices, in a digital format.

The eezi team offers a compliant solution with their Certified Invoicing Software.

Why should my business consider opting into e-invoicing before it becomes mandatory?

The European Commission (EC) strongly advocates that businesses adopt e-invoicing across the EU. The EC cites significant economic benefits for businesses opting in. By choosing e-invoicing, companies can streamline their operations, reduce costs, and improve the accuracy of their invoicing processes.

In a nutshell, mass adoption of e-invoicing:

1. Replaces physical paper forms with a structured, machine-readable electronic form that allows invoices to be handled and archived more efficiently.
2. Removes the manual work of entering the invoice information, significantly reducing errors in data entry.
3. Provides significant cost savings in printing, postage, intra-office routing, and archiving, as well as human resources.
4. Streamlines operations and getting paid faster. By automating invoicing processes, businesses can reduce errors, save time, and keep cash flowing smoothly.
5. Enables SMEs to grow without worrying about the volume of their invoices since e-invoicing solutions are scalable.
6. Help improve e-invoicing processes by leveraging technologies such as Robotic Process Automation to extract e-invoicing data. For example, to estimate indicators like the total annual CO2 consumption enhancing ESG reporting efforts.
7. Contributes to public policy priorities such as public-sector deficit reduction, financial transparency, and promotion of sustainable development.
8. Provides a better oversight of revenue, aiding budget planning and fiscal policy, while AI-powered predictive models improve tax calculations with human verification.
9. Makes material contributions to invoice error detection, cost reduction, and overall efficiency by using technologies such as AI and machine learning integrated into ERP/CRM systems to process and analyse e-invoice data.
10. Provides benefits to private sector suppliers and creates opportunities for the public sector to act as a catalyst for the wider adoption of digital processes aligned with the private sector.

Enhanced fraud detection is another significant benefit, as e-invoices provide the most accurate dataset of economic transactions. This is particularly crucial for addressing VAT revenue loss, known as the 'VAT Gap'.

Ready to opt in?

By proactively establishing the necessary technical infrastructure and processes, businesses can avoid future disruptions and also ensure a smooth transition to any newly mandated e-invoicing requirements. Not only that but businesses can be assured to reap the many benefits that implementing an e-invoicing solution has to offer.

Why make things complicated when you can make it eezi? Contact the eezi team today and get a head start on your e-invoicing journey!