Guidelines by Authorities – temporary VAT exemption – essential foods – Portugal

You use the same conditions, requirements and administrative doctrine used to apply the reduced VAT rate before the temporary exemption was in force to the same products.

2. Is the exemption applicable to intra-community acquisitions?

Yes.

3. What is covered by “Bread”?

All types of bread defined in article 3 of Order n. 52/2015, of 26 February.

What is excluded? 

– breadcrumbs;

– alike bread products or fine bakery wares;

– intermediate products or products in the course of manufacture, namely “frozen pre-cooked bread”, “frozen bread dough” or “other semi-manufactured dough”.

Covers any type of potato (e.g: white, purple, sweet), whole or cut.

What is excluded?

Dried or dehydrated potatoes, or frozen potatoes, even if previously cooked.

Smoked or flavored rice.

Preserves (e.g.: pickles).

Concentrated, evaporated, condensed, lumped or granulated milk; cream; chocolate milk, flavored, vitaminised or enriched.

Dairy products regulated by Order n.º 742/92, of July 24. Yogurts or natural fermented milks, natural, flavored or with pieces.

All types of cheese that fall within the concept of dairy products.

Canned meat or meat preparations, which are subject to VAT at the standard rate (23%).

Egg parts, egg derivatives or prepared eggs (e.g. pasteurized egg white, boiled egg).

Only tuna canned in water, olive oil or oil, excluding for example canned tuna with tomato or spices.

Products with the legal denomination “extra virgin olive oil”, “virgin olive oil” or “olive oil – composed of refined olive oils and virgin olive oils.

Blend of two or more oils from those referred to in paragraph 3 of Article 2 of Decree-Law No. 106/2005, of 29 June, refined singly or together, except olive oil.

Includes corn, sunflower and sesame oils.

The application of the exemption to these products follows criteria for the application of the reduced rate set out in Generic Ruling no. 30254 of 5 January 2023 for indent 1.4.9  List I annex to the VAT Code.

Milk fat.

What is excluded? 

E.g.: peanut butter or cocoa butter.

Dietary products for enteral nutrition – products referenced in Decree-Law no. 74/2010, of 21 June, on foodstuffs for special nutritional uses (article 2).

Gluten free products – products which are specially produced, prepared or processed in order to meet the special dietary needs of intolerant to gluten persons, excluding products which are gluten free by nature.

Chargeable event – for supply of  goods carried out between 11.04.2023 and 17.04.2023, invoiced after 17.04.2023 but within 5 working days, the temporary VAT exemption applies.

Invoicing

• invoices should reference “IVA – Isenção prevista na Lei n.º 17/2023, de 14 de abril”

• the code of exemption for invoicing software purposes is “M26 – Isenção de IVA com direito à dedução no cabaz alimentar “

*Note: This note is informative and does not replace tax advisory to a specific case