Companies that issue invoices on behalf of their suppliers must ensure the existence of a prior written agreement — a legal requirement expressly stated in Article 36 of the VAT Code and in Ordinance No. 363/2010.
Self-billing is the procedure through which the purchaser of goods or services issues the invoice in the name and on behalf of the supplier. This regime is useful in situations where the supplier does not have its own invoicing system or when the buyer centralises the administrative process.
However, this practice is only valid if it complies with very specific legal requirements, namely the existence of a written agreement between the parties.
The obligation of a written agreement is expressly set out in Article 36(11) of the VAT Code (CIVA):
– “When the invoice is issued by the purchaser of the goods or services in the name and on behalf of the supplier, there must be a prior written agreement between the parties, defining the transactions to which this procedure applies and establishing the obligation for the supplier to accept the invoices issued in its name.” (CIVA – Article 36(11))
Additionally, Ordinance No. 363/2010 of 23 June, which regulates the technical requirements for electronic invoicing and self-billing, reinforces the same requirement:
– “When the purchaser of the goods or services issues invoices in the name and on behalf of the supplier, there must be a prior written agreement between both parties, identifying the parties and the conditions under which the procedure is adopted.” (Ordinance No. 363/2010, Article 4)
Requirements of the self-billing agreement
According to the Portuguese Tax and Customs Authority (AT), the self-billing agreement must include, at a minimum:
- Full identification of the purchaser and the supplier (name, tax number, address).
- Explicit statement that invoices will be issued by the purchaser in the name and on behalf of the supplier.
- Description of the transactions covered (types of goods or services).
- Explicit acceptance of the invoices by the supplier.
- Term of validity and conditions for termination of the agreement.
- Signatures of both parties.
According to Circular Letter No. 30136/2012 from the VAT Directorate (DSIVA), the agreement must also be communicated to the Tax Authority via the e-fatura portal and kept on file for 10 years.
Consequences of non-compliance
The absence of a valid written agreement may result in invoices issued by the purchaser not being recognised for tax purposes, which may lead to:
– Denial of the right to deduct the VAT stated therein;
– Classification as irregular invoicing, subject to fines under the General Regime of Tax Infractions (RGIT).
Self-billing is a legitimate and efficient tool, but it only produces valid tax effects if supported by a prior written agreement duly communicated to the Tax Authority.
Companies and professionals must ensure that this document meets all legal requirements, guaranteeing transparency and tax validity in their operations.
ZTLM – Your partner in tax compliance and administrative efficiency.