Parliament approved a VAT Group regime under Law No. 62/2025, effective from 1 July 2026, with parents managing VAT and members jointly liable.
Regfollower Desk
Portugal’s parliament has enacted Law No. 62/2025, published in the Official Gazette on 27 October 2025, establishing a Value Added Tax (VAT) Group regime.
The parent entity is responsible for reporting and paying the group’s consolidated VAT, while each member must also fulfil individual reporting obligations and remains jointly liable for any tax due. Under the scheme, a controlling (parent) entity must hold at least 75% of the share capital and over 50% of the voting rights.
To qualify, all group members must have a permanent establishment in Portugal, carry out taxable operations, and remain within the VAT Group for at least three calendar years. Entities can only participate in one VAT Group, and the parent entity typically exercises unified management over the group.
The regime offsets VAT credits and liabilities within the group, enabling more efficient tax management. VAT credits can be carried forward or refunded, while any payment due must be settled by the parent entity, with all members jointly responsible.
The regime will apply to tax periods starting from 1 July 2026 onwards.
