Portugal: Ofício Circulado 25120/2026 Rewrites the Rules on Invoice Rectification and VAT Regularization and Repeals a 1993 Instruction
Country Update — Portugal | 25 August 2026 | Topic: VAT / Invoice Rectification and Regularization
On July 28, 2026 the Portuguese tax authority, through the Direção de Serviços do IVA, issued Ofício Circulado n.º 25120/2026 on procedures for rectifying invoices and regularizing VAT.
The twenty-page instruction expressly repeals Ofício Circulado n.º 33129/1993 of April 2, 1993 together with all earlier administrative guidance that conflicts with it, and replaces it with a modernized framework covering credit and debit notes, evidence requirements, errors of law, and regularizations arising from Decreto-Lei n.º 97/2026 of May 20, 2026.
Background
Portuguese practice on credit notes and VAT adjustments has run for more than thirty years on an instruction written in 1993, before electronic invoicing, before certified billing software, and before the body of Court of Justice case law that now governs the correction of invoices. The tax authority names all three in the preamble as the reasons the 1993 instruction had become inadequate, alongside Decreto-Lei n.º 97/2026 of May 20, 2026.
This matters more in Portugal than it would elsewhere, because Portuguese billing is tightly regulated at the document level. Invoices are produced by certified software, carry ATCUD and a QR code, and are reported through SAF-T (PT). A rule about when a credit note may be issued is therefore not an accounting convention; it is a constraint on what the certified billing system is permitted to produce and on what the SAF-T file will show.
The instruction should not be confused with the separate reform of the periodic VAT return. That is Portaria n.º 298/2026/1 of July 16, 2026, explained by Ofício Circulado n.º 25119/2026 of July 22, 2026, and covered in our update of July 23, 2026. Ofício Circulado 25120/2026 says nothing about the return models; it is about the correcting documents and the regularization mechanics that feed them.
The Legislative Change
This is administrative doctrine rather than legislation. The underlying law — Articles 29(7), 36(6), 78 and 98(2) of the CIVA — is unchanged, and the instruction operates within it. Section 71 repeals the 1993 instruction and any conflicting earlier guidance.
It is binding in practice in the ordinary way that a published administrative interpretation binds: it is the position the tax authority will apply on inspection, and departure from it has to be justified. Two of its positions are restrictive enough to change existing behavior.
The first is that credit notes must be strictly limited to the rectification actually required, and must not be used as a device to cancel invoices. The instruction states that a credit note is not admissible for purely formal errors that affect neither the taxable amount nor the VAT — a wrong NIF, a wrong address, other identification details, or the description of the goods or services — nor where the transaction never existed. Formal errors are to be corrected by cancelling the document in the billing system and reissuing it, stating the date on which the goods were made available or the services completed, with no regularization and no replacement return where one has already been filed. The instruction also draws an explicit distinction between the non-existence of an operation and the cancellation of an operation under Article 78(2).
The second is the treatment of evidence under Article 78(5). The instruction modernizes what will be accepted — electronically signed documents, electronic acknowledgements of receipt built into invoicing platforms, e-mail correspondence, and portal access logs showing date, time, user identification and document reference — but it also states that tacit contractual acceptance, meaning deemed acceptance where the customer does not object within a period, does not satisfy Article 78(5). For final consumers, proof of actual refund suffices, including set-off against later supplies to the same customer.
Scope
The instruction runs to twenty pages in six parts with sixteen worked examples: rectification and cancellation of invoices; regularizations under Article 78 of the CIVA, subdivided into evidence, non-error regularizations, invoicing and recording errors, and errors of law; regularizations by exempt taxable persons; regularizations under Decreto-Lei n.º 97/2026; computation of tax in rectifications; and transitional application and repeal.
On the basic rule, Article 29(7) of the CIVA requires that any change to the taxable amount or the tax, including an inaccuracy, be documented by a rectifying document — a credit or debit note — containing the elements listed in Article 36(6), namely a reference to the original invoice and identification of the items altered. The instruction cites Article 219 of Directive 2006/112/EC for the proposition that rectifying documents form an inseparable part of the original invoice.
On Article 78(2), regularization is optional and may be exercised up to the end of the tax period following that in which the modifying facts occurred, declared in field 40 with table 1-A of the field-40 annex.
The error matrix is set out clearly. Where the error is in favor of the taxable person, meaning output tax was overstated, regularization is optional, requires a credit note plus Article 78(5) proof, must be made within two years from the date the tax became chargeable, and is declared in field 40 with table 1-A. Where the error is in favor of the State, meaning tax was understated, regularization is mandatory, requires a debit note, and is made in the period of the error or the following period without penalty, declared in field 41 with table 1-A; thereafter a replacement return is required, with interest and fines. Pure accounting-record errors that do not affect the invoice are corrected internally, with no rectifying document.
Errors of law — a reverse charge wrongly applied, an exemption wrongly applied, or the wrong rate — require a credit note for the full amount of tax to be rectified, with recovery in the period of issue subject to Article 78(5) proof, declared in field 40 at table 3 of the field-40 annex under the line for regularizations arising from an error of law, and subject to the four-year limit in Article 98(2) of the CIVA. Where the tax authority raises an additional assessment and the supplier then issues rectifying documents, the customer's deduction period runs from receipt of those documents, following Court of Justice case law. Where the tax cannot be passed on, as with final consumers, VAT is treated as included in the price and recomputed on the inclusive basis.
Section IV addresses regularizations under Article 11 of Decreto-Lei n.º 97/2026, the housing package associated with item 2.42 of List I, and cross-refers to Ofício Circulado n.º 25.116.
Timeline
- April 2, 1993 — Ofício Circulado n.º 33129/1993 issued; the instruction now repealed.
- May 20, 2026 — Decreto-Lei n.º 97/2026, whose Article 11 regularizations are addressed in Section IV.
- July 16, 2026 — Portaria n.º 298/2026/1 reforming the periodic VAT return models (a separate instrument).
- July 22, 2026 — Ofício Circulado n.º 25119/2026 explaining that reform (a separate instrument).
- July 28, 2026 — Ofício Circulado n.º 25120/2026 issued, repealing the 1993 instruction.
- Until December 31, 2026 — transitional relief: where billing software cannot yet issue a rectifying document for the VAT amount alone, the whole operation may be cancelled by credit note and a new invoice issued.
- From January 1, 2027 — that relief ends; full restoration of document history requires both parties to file replacement returns for the original period.
Businesses Affected
Every VAT-registered business in Portugal is affected, but the impact concentrates where credit notes are issued at volume or by automated process. Groups running SAP with a certified Portuguese billing solution should assume their current correction logic was designed against the 1993 doctrine, because until July 28, 2026 there was nothing else to design against.
Three populations carry the most exposure. First, businesses that habitually cancel and reissue by credit note as a matter of routine, including for formal errors — a practice the instruction now expressly disallows. Second, businesses relying on tacit acceptance clauses in their terms of sale to satisfy Article 78(5), which the instruction states does not suffice. Third, businesses in the housing sector affected by item 2.42 of List I and Article 11 of Decreto-Lei n.º 97/2026.
Shared service centers processing Portuguese corrections from outside Portugal are a fourth group, and one where a single procedural rule tends to be applied uniformly across a whole client or entity base.
Required Actions
- Review your Portuguese credit-note process against the prohibition on using credit notes to cancel invoices, and separate formal errors — wrong NIF, address, identification details, description of goods or services — into a cancel-and-reissue path in the billing system rather than a credit-note path.
- Test whether your certified billing software can issue a rectifying document for the VAT amount alone. If it cannot, you are relying on the transitional relief, and that relief ends on December 31, 2026.
- Replace any reliance on tacit or deemed acceptance as Article 78(5) evidence. Move to acknowledgements that the instruction accepts: electronically signed documents, platform-generated receipt acknowledgements, e-mail confirmation, or portal access logs capturing date, time, user identification and document reference.
- Confirm that your Article 78(5) evidence is retained in a form that can be produced per correcting document, not merely as a mailbox archive. The instruction's list is specific about what a portal log must contain.
- Check your regularization field mapping: field 40 with table 1-A for regularizations in your favor, field 41 with table 1-A for those in favor of the State, and field 40 at table 3 for errors of law. These are distinct lines and are not interchangeable.
- Diarize the deadlines separately: two years from chargeability for errors in your favor, the period of the error or the next period for errors in favor of the State, and four years under Article 98(2) for errors of law.
- Where you receive rectifying documents following a tax authority assessment on your supplier, note that your deduction period runs from receipt of those documents, and make sure accounts payable does not treat them as out of time.
Practical Implications
The commercially significant change is the restriction on credit notes for formal errors. In many Portuguese implementations the credit note is the universal correction instrument, precisely because certified billing software makes invoice cancellation awkward. The instruction pushes correction of formal errors back into cancel-and-reissue, and that is a systems change rather than a procedural one. Organizations should expect to find that their software supports the newly required path less well than the path they are being told to stop using — which is exactly why the transitional relief to December 31, 2026 exists, and exactly why it should not be relied on quietly until December.
The evidence point is the one most likely to produce assessments. Tacit acceptance clauses are common in supply terms and have been widely treated as sufficient for Article 78(5). The instruction says they are not. Any regularization taken in reliance on deemed acceptance is now exposed, and the exposure is not limited to future periods: the instruction states the authority's reading of an unchanged statutory provision, and inspections look backwards.
There is also a quiet benefit worth acting on. By accepting platform-generated acknowledgements and portal access logs, the tax authority has for the first time described evidence that an automated system can generate as a by-product of normal operation. A group that configures its portal or invoicing platform to capture date, time, user identification and document reference converts an evidential burden into a logging requirement. That is a materially better position than chasing signed acknowledgements, and it favors groups that route Portuguese documents through a controlled platform.
Finally, the repeal of a 1993 instruction after thirty-three years is itself a signal. Portugal has been modernizing its indirect tax administration steadily — SAF-T (PT), ATCUD, certified software, and now the periodic return reform under Portaria 298/2026/1. Bringing the correction doctrine into line with that architecture was the missing piece, and it indicates that the authority now expects correction data to be as machine-readable and as auditable as the invoices themselves.
Expected Next Steps
The transitional relief expiring on December 31, 2026 is the next dated event, and certified software vendors will need to deliver VAT-only rectifying documents before it does. Separately, Ofício Circulado n.º 25119/2026 states that the remaining changes to the periodic VAT return taking effect for tax periods beginning on or after July 1, 2027 will be covered by a further administrative instruction, which should be expected during 2027.
How Can KGT Support You?
KGT is a specialist indirect tax technology firm working exclusively inside the SAP landscape. We deliver SAP-integrated e-invoicing add-ons for countries where a local mandate outpaces the standard SAP roadmap, and we implement and run SAP Document and Reporting Compliance (SAP DRC) where the standard solution is the right answer. Because we build and operate both, our advice on which route to take for a given country is not a sales position.
For the development described above, KGT typically helps clients in four ways: assessing the impact on the existing SAP configuration and interface build; carrying out the mapping and regression work against the current official specification version; managing the platform, provider or registration dependency; and running the resulting flows as a managed service, so that each release, schema version and validation change is absorbed for you rather than by you. To discuss what this means for your SAP landscape, contact KGT at
This publication is provided for general informational purposes only and does not constitute tax, legal, or professional advice. Please consult your advisor before acting on any information contained in this update.
