Zero-rated B2B sales from stock in Portugal
When a sale from Portuguese stock to a business in another EU country is exempt: the 2020 conditions, what goes wrong, and where OSS applies.
A sale from stock in Portugal to a VAT-registered business in another EU country can be invoiced without Portuguese VAT, as an exempt intra-Community supply. Since the 2020 quick fixes, three things decide it. The buyer holds a VAT number from another EU country and gives it to the seller. The goods physically leave Portugal for another EU country. And the sale appears in the seller’s recapitulative statement. The VAT number is the strict condition: without it, the seller charges Portuguese VAT. The goods must leave Portugal, but if the Article 45a presumption is not met, transport can be proven by other means. A recapitulative statement error can sometimes be justified.
The exemption lives in Article 138 of the VAT Directive, Council Directive 2006/112/EC. The trade often calls it zero-rating. This article covers business buyers only. Sales to consumers in other EU countries follow a different rule, set out at the end.
What does zero-rating look like in practice?
Suppose a maker of professional haircare products from outside the EU keeps its European stock in Portugal, released for free circulation. The figures are hypothetical. A distributor in Germany orders 20,000 euros of goods.
If the three conditions hold, the invoice carries no Portuguese VAT. The distributor accounts for VAT on its intra-Community acquisition in Germany, under German rules.
If the exemption does not apply, the sale is taxed in Portugal like a domestic one. At Portugal’s standard rate of 23 percent on the mainland, that is 4,600 euros of VAT on this single order. Either it is charged on the invoice, or, if the failure surfaces later, the seller faces the bill after the sale is closed.
For a business from outside the EU, the Portuguese VAT registration that makes any of this possible runs through fiscal representation.
What changed with the 2020 quick fixes?
The rules were tightened by Council Directive (EU) 2018/1910 and Council Implementing Regulation (EU) 2018/1912, both of 4 December 2018. The changes entered into force on 1 January 2020. The European Commission published explanatory notes on them in December 2019. The notes are not legally binding, but they carry guidelines agreed by the VAT Committee.
Three changes matter for a seller. The buyer’s VAT number became a substantive condition of the exemption, not a formality. The recapitulative statement became a condition too. And Article 45a of the VAT Implementing Regulation created a presumption that the goods were transported, if certain documents exist.
Condition one: a valid VAT number, communicated
Article 138(1) exempts the supply where the buyer is identified for VAT in a member state other than the one the goods leave, and has indicated that number to the supplier.
The Commission’s notes clear up three practical points. The number does not have to come from the destination country; any EU country other than Portugal will do. The way the number is communicated has no formal requirement, and a number shown on the supplier’s invoice counts as communicated. Only a number with a country prefix, the one listed in VIES, qualifies. Some countries also issue numbers valid only for domestic transactions, and those do not count.
The notes are just as clear on the failures. If the buyer gives no number, or gives a Portuguese one, the supplier “has to charge VAT”. That holds even where every other condition is met and the goods plainly look like business goods. If the buyer has applied for a number but not yet received it when the invoice is issued, the exemption cannot apply either. Where the buyer later provides a valid number, can prove it was a taxable person acting as such at the time of the acquisition, and there is no sign of fraud or abuse, the invoice can be corrected under national rules.
Condition two: proof the goods left Portugal
The goods must be dispatched or transported from Portugal to another EU country. Article 45a of Implementing Regulation (EU) No 282/2011 sets a presumption that this happened, in two cases.
Where the seller, or a third party for it, arranges the transport, the seller needs two documents that agree, from two businesses independent of each other and of both seller and buyer. Both can come from the first list below, or one from each list.
- Transport documents: a signed CMR, a bill of lading, or a carrier invoice.
- Supporting documents: an insurance policy or bank record for the transport, official documents confirming arrival, or a receipt from a warehouse keeper in the destination country.
Where the buyer arranges the transport, the seller also needs a written statement from the buyer confirming the goods arrived. The buyer is meant to provide it by the tenth day of the month after the supply. The Commission’s notes add that a late statement can still be used.
Four points from the notes are easy to miss:
- Own transport breaks the presumption. If the seller or the buyer moves the goods in its own vehicles, the documents do not come from independent parties.
- Related parties are not independent. Parties sharing a legal personality, or linked by management, ownership or financial ties, do not count as independent.
- The presumption can be rebutted. If the tax authority finds the goods still in the seller’s warehouse, the exemption does not apply.
- Failing the presumption is not the end. The seller can still prove transport by other means, but the burden of proof then sits with the seller.
Condition three: the recapitulative statement
Under Article 138(1a), the exemption does not apply where the supplier has not filed its recapitulative statement, or has filed one with incorrect information about the supply, unless the supplier can duly justify the shortcoming to the tax authorities.
Under Article 263, the statement covers each calendar month and is filed within a period not exceeding one month. Member states may allow quarterly filing where intra-EU supplies of goods stay below 50,000 euros a quarter, in the current quarter and each of the four before. Portugal’s filing calendar is confirmed with the fiscal representative.
The VAT Committee’s guideline sets out the timing. The supplier applies the exemption when it makes the supply, if the conditions of Article 138(1) are met then. It is withdrawn later only if the tax authority establishes that the statement was missing or wrong. The Commission’s notes give examples of a justified shortcoming, if corrected once noticed. A supply reported in the following period’s statement by mistake is one. An unintentional error in the value is another.
What goes wrong in practice?
Most failures are ordinary, and most are avoidable:
- The buyer’s number is missing, pending, domestic-only or Portuguese, and the invoice is issued without VAT anyway.
- The buyer collects with its own truck, and nobody obtains the written statement or independent documents.
- The transport documents come from a company related to the seller or the buyer.
- The goods are still in the seller’s warehouse when the documents say they have left.
- The recapitulative statement is late, or reports the wrong value or the wrong buyer number.
- A consumer is invoiced as if it were a business. That is a distance sale, not an intra-Community supply.
Not every slip is fatal. A missing presumption can be replaced by other proof of transport, and a statement error can sometimes be justified. A missing or Portuguese VAT number cannot. Where the exemption is lost, the seller carries the consequence: in the example above, 4,600 euros of VAT due in Portugal.
Where does OSS apply instead?
The intra-Community supply exemption is for business buyers. A sale from Portuguese stock to a consumer in another EU country is an intra-Community distance sale. It carries the VAT of the consumer’s country.
For a seller from outside the EU, that applies from the first euro. The annual 10,000 euro threshold, below which distance sales can stay taxed where the goods start, requires the supplier to be established in only one member state. A business established outside the EU does not meet that condition.
That VAT can be declared through the Union One Stop Shop. The European Commission states that any taxable person, established in the EU or not, can declare intra-Community distance sales of goods in that scheme. The return is quarterly, filed by the end of the month after the quarter.
The boundary, and why OSS never covers business buyers, is set out in OSS, IOSS, and what they do not cover. How one stock pool serves both kinds of buyer is in one stock pool, two kinds of buyer.
This is general information, not legal or tax advice. Whether a specific sale qualifies is for the seller’s tax adviser and the tax authority to decide.
How this runs at EFC
Dispatches to business buyers leave EFC’s base in Portugal, run with its logistics partner, with the transport documents for each one kept in the file. Whether those documents meet the Article 45a presumption depends on who issued them and who carried the goods, so the route, carrier included, is chosen with the client on the facts. EFC does not give legal or tax advice; the treatment of each sale is for the client’s tax adviser.
The wholesale side of the operation is on business orders. The Portuguese VAT registration and returns are on fiscal representation, and consumer sales on OSS VAT.
Sources
| Label | Value | Source |
|---|---|---|
| Exemption conditions | buyer identified for VAT in another member state and has indicated the number; recapitulative statement condition | Directive 2006/112/EC, Article 138(1) and (1a), EU text on legislation.gov.uk, opened 2026-08-20 |
| Recapitulative statement period | each calendar month, within one month; quarterly below 50,000 euros a quarter | Directive 2006/112/EC, Article 263, EU text on legislation.gov.uk, opened 2026-08-20 |
| Proof of transport presumption | two independent non-contradictory items; buyer’s written statement by the tenth day of the following month | Implementing Regulation (EU) No 282/2011, Article 45a, EU text on legislation.gov.uk, opened 2026-08-20 |
| Quick fixes, legal acts and date | Directive (EU) 2018/1910 and Implementing Regulation (EU) 2018/1912 of 4 December 2018; in force 1 January 2020 | European Commission, Explanatory Notes on the 2020 Quick Fixes, pages 1, 3 and 9, opened 2026-08-20 |
| VAT number, practical points | any other member state’s number; no formal communication rule; only VIES-listed numbers; no number means VAT charged; later correction needs proof the buyer was a taxable person acting as such | Explanatory Notes on the 2020 Quick Fixes, sections 4.2 and 4.3.2 to 4.3.4, opened 2026-08-20 |
| Recapitulative statement, timing | exemption applied at supply; revoked retroactively only on established non-compliance; justified shortcomings | Explanatory Notes on the 2020 Quick Fixes, sections 4.3.1 and 4.3.6, opened 2026-08-20 |
| Proof of transport, practical points | own transport; independence; rebuttal; other evidence; late written statement | Explanatory Notes on the 2020 Quick Fixes, sections 5.2 and 5.3.1 to 5.3.8, opened 2026-08-20 |
| Portugal, standard rate | 23 percent | Código do IVA, artigo 18.º, Portal das Finanças, opened 2026-08-20 |
| 10,000 euro threshold | requires the supplier to be established in only one member state; suppliers established outside the EU cannot use it | European Commission, The One Stop Shop, opened 2026-08-20 |
| OSS Union scheme | intra-Community distance sales of goods, by any taxable person established in the EU or not; quarterly return by the end of the following month | European Commission, VAT One Stop Shop, Declare and pay, opened 2026-08-20 |