Recibo Verde in Portugal: The Complete Guide

Discover everything you need to know about Recibo Verde in Portugal. Learn how to issue a Recibo Verde, tax obligations, VAT rules, social security, NHR benefits, and how INLIS Consulting can help you register and stay compliant.

What is Recibo Verde? (Understanding the Green Receipt System in Portugal)

The term Recibo Verde (literally “green receipt”) refers to an official electronic invoicing system in Portugal used by independent workers (freelancers) to declare income and charge clients.

When you perform a service, instead of receiving a salary like a traditional employee, you issue a Recibo Verde through the Portuguese tax portal (Portal das Finanças). This document serves as both:

✅ An invoice to your client

✅ Proof of income to the tax authorities

Key Characteristics of Recibo Verde

• It is mandatory for all self-employed professionals in Portugal

• It is entirely digital (no paper receipts)

• It automatically communicates your income to the Tax Authority (AT) and Social Security

• It determines your tax payments under the IRS (income tax) and VAT systems

If you want to work legally as a freelancer, consultant, coach, designer, therapist, IT specialist, or remote service provider, you cannot avoid Recibo Verde.

Who Needs to Use the Recibo Verde System?

You must register and use Recibo Verde if you fall under any of the following categories:

1. Freelancers and Self-Employed Professionals

• Graphic designers, marketing consultants, copywriters, translators

• IT specialists, software developers, UX/UI designers

• Digital nomads offering online services

2. Remote Workers Paid by Foreign Companies

Even if your client is based outside Portugal (e.g., USA, UK, Germany, Dubai), if you are a tax resident in Portugal, you must issue Recibo Verde to declare your income.

3. Professionals Offering Physical or Local Services

• Yoga instructors, photographers, and interior designers

• Therapists, personal trainers, tutors

4. Entrepreneurs and Small Business Owners Using Independent Activity Codes

Instead of forming a company, many people choose to work as an independent service provider under a professional activity code (CIRS code).

Why is Recibo Verde Important?

Using Recibo Verde is not just a formality—it determines your legal status, your tax obligations, and your eligibility for social benefits such as:

• Pension contributions

• Healthcare access

• Unemployment benefits (in certain cases)

• Maternity and parental support

Failure to register or issue Recibo Verde correctly can result in fines and legal penalties.

Comparison Table: Employee vs Freelancer Using Recibo Verde

Feature	Employee (Contrato de Trabalho)	Freelancer (Recibo Verde)
Tax Withholding	Done by the employer	Managed by a freelancer
Social Security	Paid by employer (23.75%) + employee (11%)	Paid only by freelancer (21.4%)
Flexibility	Fixed working hours	Total freedom
Income Potential	Fixed salary	Unlimited earnings
Invoicing	Not required	Must issue Recibo Verde
Deductible Expenses	Limited	Many business expenses are deductible
Suitable For	Full-time employees	Independent professionals, consultants, and remote workers

How to Register for Recibo Verde in Portugal (Step-by-Step Guide)

To issue a Recibo Verde, you must first register as a self-employed professional with the Portuguese Tax Authority (Autoridade Tributária - AT). Below is the complete step-by-step process to legally start issuing receipts:

Step 1: Make Sure You Have Your NIF (Portuguese Tax Identification Number)

• This is the first requirement for any tax activity in Portugal.

• If you are a foreign national, you can obtain your NIF with or without residency.

However, if you are not a resident yet, you will need to appoint a fiscal representative.

If you do not have a NIF, INLIS Consulting can secure one for you remotely.

Step 2: Register as a Freelancer (Início de Atividade)

You can register your activity in one of two ways:

Option A: Online via Portal das Finanças

1. Log in to: https://www.portaldasfinancas.gov.pt

2. Go to: "Cidadãos" → "Entregar" → "Declarações" → "Início de Actividade"

3. Fill out the form with:

   
   

   • CAE or CIRS Code (your professional activity code)

   • Expected annual income

   • Choice of tax regime (simplified regime or organized accounting)

   • IVA (VAT) status – whether you are exempt or not

   • Social Security registration

     
     

Option B: In Person at Finanças Office

• Bring your passport, residence card or visa, and proof of address.

• Request “Início de Actividade como Trabalhador Independente”.

👉 Important: Selecting the wrong activity code or tax regime can result in overpayment of taxes. Having assistance from accountants like INLIS Consulting ensures correct registration.

Step 3: Choose the Correct Tax Regime

Regime	Recommended For	Description	Taxation Basis
Simplified Regime	Income < €200,000/year	Default option	Fixed percentage (usually 75% assumed as taxable income)
Organized Accounting (Contabilidade Organizada)	Income > €200,000 or a business with many expenses	Must have a certified accountant	Tax calculated on actual profits

💡 Most freelancers start under the simplified regime

.

Step 4: Determine Your VAT (IVA) Status

• IVA Exemption under Article 53: If your annual income is expected to be below €14,500 (may be updated annually), you can apply for VAT exemption.

• With VAT: If you exceed the threshold or provide services to companies in Portugal, you must charge 23% VAT (or applicable reduced rate).

Recibo Verde and International Clients

• If your client is an EU company with a valid VAT number → no VAT charged (reverse charge mechanism).

• If your client is outside the EU, → usually exempt from VAT.

• If your client is an individual or Portuguese company → VAT may apply.

  
  

Step 5: Register with Social Security (Segurança Social)

• New freelancers are usually exempt from contributions for the first 12 months.

• After that, you will contribute 21.4% of your declared income (simplified regime).

• These contributions count toward pension, maternity benefits, illness support, etc.

How to Issue a Recibo Verde (Electronic Invoice) in Portugal

Once registered, here’s how to issue your first Recibo Verde:

Step-by-Step on Portal das Finanças

1. Log in to Portal das Finanças

2. Go to: Serviços → Recibos Verdes Eletrónicos → Emitir

3. Select the type of receipt:

   • Recibo (Receipt)

   • Fatura-Recibo (Invoice-Receipt) – most common for freelancers

4. Enter client details (NIF or VAT number)

5. Enter service description and amount

6. Choose VAT status (Isento or with IVA)

7. Submit and generate the Recibo Verde

Once issued, it is automatically registered with the tax authorities. You do not need to manually submit it elsewhere.

Common Mistakes to Avoid When Issuing Recibo Verde

Mistake	Consequence	Solution
Choosing the wrong IVA code	Unexpected VAT liability	Get professional registration
Incorrect activity code	Higher taxes or penalties	Use the correct CIRS/CAE code
Not issuing Recibos on time	Fines and audits	Issue immediately after payment
Forgetting quarterly VAT declarations	Heavy penalties	Use INLIS Consulting for compliance

Need Help Registering or Issuing Recibo Verde Correctly?

INLIS Consulting can complete the entire process for you, from tax registration to managing your Recibo Verde obligations, VAT submissions, and IRS declarations—ensuring you stay fully compliant while focusing on your work.

📞 Contact us now at: geral@inlis.pt