Extraordinary VAT exemption applicable in Portugal on the purchase of goods to combat COVID-19 extended until 30 April 2021
Tax Alert Portugal
The Portuguese Government, through SEAF Order no. 450/2020.XXI, has again extended the VAT exemption applicable to domestic supplies and intra-Community acquisitions of goods necessary to combat COVID-19 established in Article 2 of Law no. 13/2020, of 7 May, amended by Law no. 43/2020, of 18 August, now from 31 October 2020 to 30 April 2021.
This extension is included in the State Budget Law Proposal for 2021, which was approved by the Parliament on November 26. However, considering the delay in publishing this diploma, the Government opted to assign immediate effects to this measure, taking also into account the Commission Decision (EU) 2020/1573 of 28 October, which extended until 30 April 2021 the VAT exemption for imports of goods of the same nature provided for in Commission Decision (EU) 2020/491 of 3 April.
Invoices that have already been issued in November with VAT may be rectified by issuing the corresponding credit note and the respective VAT might be adjusted according to the procedure described in Circular Letter No. 30222/2020, of 25 May.
It is recalled that this exemption (with the right to deduct) applies, namely, to goods acquired by the State and by establishments that are part of the National Health Service, including those in the private or social sector. Please find more information about the initial approval of this measure here.
Finally, we remind that this exemption had already been extended by Law no. 43/2020, from 18 August, from 31 July to 31 October 2020.
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