How to Claim a Portugal VAT Refund When You Visit the Country

If you're a non-European Union (EU) resident shopping in Lisbon or other parts of Portugal, you may notice a VAT (Value Added Tax) added to your receipts. VAT is a consumption tax added to each item you buy, resulting in an extra cost to consumers.

In Portugal, there are three value-added tax (VAT) rates: 23 percent for most goods, 13 percent for some items like bottles of wine, and 6 percent for medicines, books, and optical lenses. In fact, VAT can drive up the cost of items by quite a lot. The good news is that as a non-EU resident, you can actually claim a VAT refund for your eligible purchases under specific circumstances.

In this guide, we'll explain the tax-free regime, and we'll walk you through the process of claiming a VAT refund in Portugal.

Who can claim a VAT refund?

Non-EU residents are eligible to claim a VAT refund on purchases made in Portugal. To qualify for a refund, you must meet certain criteria and follow the necessary instructions. European Union residents are not entitled to claim a VAT refund in Portugal.

To be eligible for a VAT refund in Portugal, your purchases must amount to at least €50 in a single transaction. This requirement ensures that the tax-free process is used for significant purchases. The goods you purchase must be taken out of the EU within three months of the purchase date.

Which purchases are eligible for a VAT refund?

For your purchase to be VAT exempt:

You must purchase items that you will take with you when leaving the country.
These items must be bought from participating retailers in the tax-free scheme.
It's important to note that certain purchases, such as hotel bills and restaurant meals, are not eligible for a VAT refund.
Additionally, there is a minimum purchase requirement for each receipt to be eligible for a return.
The total amount of the receipt, excluding VAT, must be €50 or more.

Look for signs indicating "VAT Refund" or "Tax-Free Shopping" in shop windows, or simply inquire with the retailer to ensure they participate in the VAT refund scheme.

If Portugal is your final destination within the EU, any purchase within EU countries that meets the above criteria is eligible for VAT compensation. However, if Portugal is just a stop on your journey within the EU, you should claim the VAT refund in the last country you visit before leaving the EU.

What is the VAT rate in Portugal?

There are three value-added tax (VAT) rates in Portugal:

Standard rate: 23 percent for most goods and services not covered by the reduced rates
Intermediate rate: 13 percent for certain goods and services such as restaurant services, some food products, and other specific items
Reduced rate: 6 percent for essential goods and services like basic foodstuffs, books, newspapers, medicines, and others

The VAT rates are lower in the autonomous regions of the Azores and Madeira.

When Purchasing an Item in Portugal

If your purchase meets the eligibility criteria for a VAT return, inform the retailer that you wish to benefit from the VAT refund scheme.

They will ask for your passport and provide you with a regular receipt along with a special tax-free form containing personal details and a registration code. It's essential to keep both the receipt and the tax-free form, as you will need them to claim the VAT refund at the airport.

The process of claiming a VAT refund in Portugal is now electronic through the e-Taxfree Portugal System.

Tax-free shopping

When purchasing an item in Portugal, you can take advantage of tax-free shopping. Here's how the process works:

Inform the retailer that you want to benefit from the VAT refund scheme.
Provide your passport information.
Receive a regular receipt and a special tax-free form with a registration code.

Claiming a VAT Refund at the Airport

To claim your VAT return at the airport, follow these steps on the day of your EU departure:

Arrive at the airport early

Arrive at the customs desk at the airport well in advance, allowing at least 30 minutes for the VAT refund process. However, keep in mind that during peak times or if you're in line behind a tour group, the process might take longer.

Put the purchased item in your checked or hand luggage

Depending on whether you've put the purchased item in your checked luggage or your hand luggage, follow the corresponding steps:

Checked luggage

Inform the airport check-in staff that you have an item to declare for a VAT compensation. Then, proceed to an e-Taxfree Portugal kiosk with your passport or other identity document, boarding pass, the purchased items, and the validated form. Follow the instructions on the kiosk, and if approved, you'll see "Code Green." If not approved, "Code Red" means you need to go to the Customs desk.

Hand luggage

After passing through security control and customs, head to an e-Taxfree Portugal kiosk with your passport, boarding pass, the item, and the form. Follow the instructions on the kiosk, and if approved, you'll see "Code Green." If not approved, "Code Red" means you need to go to Customs.

After receiving the "Code Green" approval

Checked baggage: Return to check your luggage.
Hand luggage: Present the validated tax-free form at the respective operator's desk to receive an instant refund in cash or credit.

If you don't receive an instant refund, you can drop the validated tax-free form in the available drop boxes. The VAT refund payment will be issued to your credit card or sent to your home address in the form of a cheque. Please be aware that an administrative fee might be paid for this service.

Key Takeaways

As a non-EU resident shopping in Portugal, you can claim a VAT refund on eligible purchases. Remember to keep your receipts and tax-free forms, and follow the necessary steps at the airport to receive your return. As a digital nomad tax payer in Portugal, this can be hugely beneficial, too.

You might also find the following blog posts useful if you're considering a trip to Portugal:

Frequently Asked Questions about Portugal VAT Refunds

What is a tax-free form?

A tax-free form, also known as a refund form or VAT refund form, is a document provided by participating retailers to non-EU residents who make eligible purchases. It is a crucial part of the VAT refund process.

When you buy items that qualify for VAT compensation, the retailer will give you this form along with your regular receipt. The form contains essential information such as the registration code, details of the items, and the amount of VAT paid.

How much is the VAT refund in Portugal?

The VAT refund amount in Portugal depends on the VAT rate applied to the eligible items purchased. There are different rates for taxes in Portugal when it comes to various goods and services. The standard VAT rate is 23 percent, and the reduced rates are 13 percent and 6 percent, applicable to specific items like bottles of wine, medicines, books, and optical lenses.

How do I claim tax back from Portugal airport?

To claim tax back (VAT refund) from Portugal airport, follow these steps:

Ensure you are a non-EU resident, as only non-EU residents are eligible for a VAT refund.
Ensure that your purchased goods are valid for a VAT refund.
When making a purchase, ask the retailer for a tax-free form and keep the regular receipt.
On the day of your EU departure, arrive at the airport with ample time before your flight departure.
Depending on whether the purchased item is in your checked or hand luggage, visit the e-Taxfree Portugal kiosk with your passport, boarding pass, and tax-free form.
Follow the instructions on the kiosk, and if approved, you will receive a "Code Green," indicating that your VAT refund is approved.
If you don't get an instant refund at the kiosk, you can drop the validated tax-free form in the available submission boxes. The refunded VAT will be issued to your credit card or sent to your home address in the form of a cheque, minus any applicable administrative fees.

What are the VAT rules in Portugal?

The VAT rules in Portugal are in line with the regulations set by the European Union. Portugal has three VAT rates:

Standard VAT rate: 23 percent - Applied to most goods and services.
Reduced VAT rate: 13 percent - Applied to specific items like bottles of wine.
Super-reduced VAT rate: 6 percent - Applied to items such as medicines, books, and optical lenses.

Non-EU residents are eligible to claim a VAT refund on eligible purchases they take with them when leaving the country, provided they meet the minimum purchase requirement and follow the necessary procedures for claiming the refund at the airport.

What is the VAT rate in Portugal for non-residents?

The VAT rate in Portugal for non-residents is the same as the standard VAT rate, which is 23 percent. This rate is applied to most goods and services. However, as a non-EU resident, you have the opportunity to claim a VAT refund on eligible purchases made during your stay in Portugal, reducing the effective VAT rate on those items.

Who is the reimbursement operator/refund operator?

The reimbursement operator collects, processes, and manages the VAT refund process for eligible purchases made by non-EU residents. In Portugal, several operators are authorized to handle VAT refunds for tourists. These operators facilitate the refund process and ensure that eligible travelers receive their VAT refunds in a timely and efficient manner.

When a non-EU resident makes a qualifying purchase and obtains a tax-free form from the retailer, they have the option to approach a refund operator to claim their VAT refund. The refund operator may have desks or kiosks at the airport where travelers can present their validated tax-free form and receive an instant VAT return in cash or credit, if applicable.

If an instant refund is unavailable at the airport, the traveler can drop the validated tax-free form in the available submission boxes provided by the reimbursement operator. The operator then processes the refund and issues a payment to the traveler's credit card or sends it to their home address in the form of a cheque after deducting any administrative fees paid, if applicable.

How to Claim a Portugal VAT Refund