VAT rates in Portugal
Portugal has three VAT rates — standard, intermediate and reduced — and the figures change by region. On the mainland they're 23%, 13% and 6%. In Madeira they're 22%, 12% and 4% (the reduced rate dropped from 5% to 4% in October 2024), and in the Azores 16%, 9% and 4%. This calculator applies the correct rate for whichever region you choose.
Adding or removing VAT
"Add" starts from an amount without VAT and adds the tax — useful for issuing invoices. "Remove" starts from an amount that already includes VAT and shows the base and the tax — useful for figuring out how much of an invoice is tax.
VAT for TVDE drivers
Anyone driving for Uber, Bolt or Free Now faces a fork most service providers do not. Bill under €14,500 a year and you can stay in the exemption regime (article 53): no VAT charged, no periodic returns, but no reclaim on fuel, insurance or maintenance either. Enter the standard regime — above that threshold, or by choice — and you charge 6% VAT on trips, not 23%, and can reclaim VAT on car expenses: diesel at 50%, petrol not at all, EV charging at 100%.
Exemption or standard regime — which to choose?
If you bill under €14,500 a year, you can stay in the exemption regime (article 53): you don't charge VAT on invoices and don't file periodic returns, but you also can't reclaim VAT you pay on fuel, insurance or maintenance. Above that threshold — or if you opt in — you enter the standard regime: you charge 6% VAT on trips (not the 23% many people assume) and can deduct part of the VAT on car expenses. Registration and returns are always done through the Portal das Finanças.
Why 6% and not 23%?
Passenger transport falls under List I attached to the VAT Code (item 2.14), which applies the reduced rate. Drivers are often confused by this because most services provided by self-employed workers use 23% — passenger transport is a specific exception.
Can I reclaim VAT on fuel?
It depends on the fuel. Diesel is 50% deductible, petrol is not deductible, and electricity for charging an EV is 100% deductible — one more reason many TVDE drivers consider switching to electric. Maintenance and repairs are usually 100% deductible, provided the vehicle is used exclusively for the activity.
Worked examples: adding and removing VAT
The calculator has two directions, and mixing them up is the most common VAT mistake. Adding VAT starts from a price without tax: on €1,000 at the 23% standard mainland rate, VAT is €1,000 × 23% = €230, and the total is €1,000 + €230 = €1,230. At the 6% reduced rate that applies to passenger transport, the same €1,000 gives €1,000 × 6% = €60 of VAT and a total of €1,060. Removing VAT starts from a price that already includes it: €1,230 including 23% gives a base of €1,230 ÷ 1.23 = €1,000 and VAT of €1,230 − €1,000 = €230. A TVDE example at 6%: €530 including VAT gives a base of €530 ÷ 1.06 = €500 and VAT of €530 − €500 = €30. The division is the step people skip — subtracting 23% from €1,230 gives €947.10, which is wrong, because the 23% was calculated on the base of €1,000, not on the total.
| Case | Base | VAT | Total |
|---|---|---|---|
| Add 23% to €1,000 | €1,000.00 | €230.00 | €1,230.00 |
| Add 6% to €1,000 | €1,000.00 | €60.00 | €1,060.00 |
| Remove 23% from €1,230 | €1,000.00 | €230.00 | €1,230.00 |
| Remove 6% from €530 | €500.00 | €30.00 | €530.00 |
Which rate, and which regime
Most goods and services use the 23% standard rate on the mainland, while passenger transport falls under the reduced 6% rate (List I attached to the VAT Code, item 2.14) — the distinction that confuses drivers who expect 23% because most self-employed services use it. Alongside the rates sits a separate choice: the exemption regime under article 53. If you bill under €14,500 a year, you can stay in the exemption regime, which means you do not charge VAT on invoices and do not file periodic returns — but you also cannot reclaim VAT you pay on fuel, insurance or maintenance. That trade is the heart of the decision: exemption saves paperwork and keeps invoices simple, at the cost of every euro of input VAT becoming a final cost. The standard regime is the reverse: you charge VAT, file returns, and reclaim input VAT where the rules allow.
Reclaiming VAT: fuel makes the difference
What you can reclaim depends on the fuel, and the differences are large enough to change vehicle decisions. On €100 of VAT paid, the deductible amounts are:
| Fuel / energy | Deductible share of VAT | On €100 of VAT |
|---|---|---|
| Diesel | 50% | €50 reclaimable |
| Petrol | not deductible | €0 reclaimable |
| Electricity for charging an EV | 100% | €100 reclaimable |
A driver spending heavily on diesel recovers half the VAT; a driver on petrol recovers none of it; a driver charging an EV recovers all of it. That single table is one more reason many TVDE drivers consider switching to electric, alongside the per-km energy costs the EV Cost page works out. And because VAT interacts with everything else a driver bills and spends, it is worth seeing it next to the Monthly Income page, where the month's revenue, costs and tax set-asides sit together: VAT is a flow-through tax, not income, and treating it as income is how drivers end up short when the return falls due.
Frequently asked questions
Which rate should I use?
Start from the region, then the category. On the mainland the three rates are 23% standard, 13% intermediate and 6% reduced; in Madeira 22%, 12% and 4%; in the Azores 16%, 9% and 4%. Passenger transport is the exception drivers trip over: it uses the 6% reduced rate (List I attached to the VAT Code, item 2.14), not the 23% most self-employed services use. For a borderline case, check your CAE code or ask an accountant.
How do I calculate VAT on an amount?
To add VAT, multiply the amount without VAT by the rate factor (e.g. ×1.23 for 23%) to get the amount with VAT. To remove VAT from an amount that already includes it, divide by the same factor (÷1.23) to reach the amount without VAT. The calculator above does both automatically.
What does "VAT included" mean?
It means the price shown already contains the tax — it's the final amount payable. The "amount without VAT" is the base before tax is added. Use "Remove VAT" mode above to see both figures starting from a VAT-included price.
What is the most common VAT mistake?
Removing VAT by subtracting the rate from the total. On €1,230 including 23%, subtracting 23% gives €947.10, which is wrong: the 23% was calculated on the €1,000 base, not on the total. The correct move is division: €1,230 ÷ 1.23 = €1,000 base, and €1,230 − €1,000 = €230 of VAT. The calculator's remove mode does exactly this division, which is why its base and VAT figures always reconcile with the total.
Does the exemption regime suit a new driver?
Often, yes, while billing stays under €14,500 a year: no VAT charged on invoices and no periodic returns to file. The cost is that input VAT becomes final — no reclaim on fuel, insurance or maintenance. A driver whose input VAT is small, or who values simple paperwork while starting out, usually comes out ahead; a driver with heavy deductible costs, especially diesel at 50% or EV charging at 100%, should run both regimes through the numbers before choosing, because the reclaim can outweigh the paperwork.