Tax Free Portugal: VAT Refunds for Tourists, Expats & Businesses

How Tax Free Portugal works in 2025. Learn VAT refund rules for tourists, expats, and business owners, see rates and examples, and get expert help from INLIS Consulting to maximize your tax savings.

Portugal’s thriving shopping scene comes with a cost: most goods carry a 23% value-added tax (VAT). Fortunately, Portugal’s tax-free shopping scheme allows qualifying non-residents to reclaim some of the VAT on purchases they take out of the EU.

This guide explains Portugal’s VAT rates, who is eligible to claim refunds (tourists, residents, and businesses), and the process for claiming them. We also give examples of refunds and differences by group. For personalized tax or VAT advice in Portugal, consider partnering with INLIS Consulting, a trusted expert in Portuguese tax and business matters.

Tax Free Portugal’s VAT Rates

Portugal applies three VAT rates on goods and services. The standard rate is 23% on the mainland (22% in Madeira and 16% in the Azores). There is an intermediate rate of 13% (12% in Madeira; 9% in Azores) and a reduced rate of 6% (4% in Madeira and Azores). (These lower rates generally cover essentials like certain foods, books, medicines, etc.) Exports and intra‑EU shipments are generally zero-rated (0% VAT).

The table below summarizes the rates:

VAT Rate	Mainland (%)	Madeira (%)	Azores (%)	Typical Goods/Services
Standard	23	22	16	Most goods and services
Intermediate	13	12	9	Select foods, wine, domestic tourism (hotels, restaurants)*
Reduced	6	4	4	Basic foods, books, medicines, newspapers

*Madeira and Azores rates apply only in those regions.

Who Qualifies for Tax-Free Shopping?

Tourists (Non‑EU Visitors):  Only visitors who habitually reside outside the EU can use Portugal’s tax-free shopping scheme. In practice, this means that non‑EU nationals (including Brexit UK citizens) who enter Portugal as tourists or for short stays can claim VAT refunds on eligible purchases.

To qualify, each purchase must be €50 or more (including VAT) in one store on one day. Purchases must be goods (not services) that you will take home in your personal luggage within 3 months of the purchase. (Items consumed or used in Portugal – e.g., hotel stays, meals, local transport – are not eligible.)

In summary, non‑EU tourists who buy goods worth at least €50 and export them within 3 months can get a VAT refund.

Expats and Residents:  If you are a resident of Portugal or any other EU country, you do not qualify for tax-free shopping. The scheme is strictly for non‑EU residents.

For example, a foreign-born person living in Portugal with EU residency is treated as a Portuguese resident for VAT purposes and cannot claim tax-free. EU nationals and foreign residents in Portugal pay VAT at purchase time and must follow standard tax rules (no exit refund). (The Your Europe guide explicitly states that only those living outside the EU are entitled to refunds.

Business Owners:  Business expenses follow different rules. If you buy goods for business use in Portugal, you generally claim VAT back through the company’s regular VAT filings, not the tourist tax-free scheme.

For Portuguese businesses, the VAT paid on purchases is usually set off against VAT collected on sales. If goods are exported (sent to customers outside Portugal/EU), they are typically zero-rated (no VAT). Foreign businesses can also recover Portuguese VAT: an EU‑based company can apply electronically for a refund under EU Directive 2008/9, and a non‑EU company must appoint a tax representative in Portugal to claim any VAT refund.

In short, businesses do not use the “tax-free shopping” scheme; they use standard VAT-return procedures to recover VAT on eligible expenses.

How to Claim a VAT Refund (Tourists)

Eligible shoppers follow these key steps to claim tax-free VAT in Portugal.

• Request the tax-free form at checkout.  When you buy your goods (in a store that participates in tax-free shopping), present your passport and ask the retailer for a tax-free purchase form (sometimes called a cash refund form). The form will include a registration code and details of your purchase. Keep all receipts and the stamped forms; you’ll need them to prove your purchase.

• Prepare at the airport.  On departure (from a Portuguese airport or border), go to the customs area before checking in for your flight. Look for the e‑Tax Free Portugal kiosk (electronic terminal) and have these ready: your passport, boarding pass, the tax-free forms with registration codes, the original invoices, and the purchased goods. (If some goods are checked luggage, inform the airline so they can tag them for customs.)

• Validate your claim with customs.  Use the kiosk to scan your documents and obtain electronic validation. The machine will give you a confirmation code or ask you to visit a customs desk if needed. A green code means your claim is approved; a red code means see a customs officer for manual stamping.

• Get your refund.  After validation, go to a VAT refund operator in the airport (or drop your form in a refund box). You can usually choose an immediate cash or credit refund. At the counter, you’ll receive the refund on the spot (by cash, credit card, or check) once the operator verifies your stamped form. If you use a drop box, your refund will be processed later and sent by mail or electronic transfer.

Most major Portuguese airports (Lisbon, Porto, Faro) have e-TaxFree kiosks and refund desks. Lisbon Airport, for example, has refund operators in Terminals 1 and 2. Make sure to arrive at the airport 2–3 hours before departure to complete the process without rushing.

Example Calculation

To see what a refund might look like, consider a €200 purchase with 23% VAT (VAT portion €37.40). Refund operators charge processing fees, so you typically get about 10–17% of the total invoice back.

In this example, that’s roughly €20–€34. The exact refund depends on the retailer’s fee and the VAT rate on the item. (For instance, if the item had 13% VAT, the net tax is smaller and your refund would be correspondingly lower.) In practice, tourists often receive around 12–15% of their purchase amount as cash back.

For example, on a €500 shopping spree, you might expect roughly €60 back after fees.

Key Differences by Group

• Tourists:  Non‑EU visitors get tax-free refunds on eligible goods, following the procedure above.

• EU/Residents:  EU citizens and Portuguese residents pay VAT like locals and cannot claim tax-free refunds (the rules require non-EU residency).

• Businesses:  Companies and self-employed people recover VAT through invoices and tax returns, not the tourist system. Registered firms simply deduct input VAT on their VAT return or apply for formal refunds (e.g., via Directive 2008/9 if foreign). Goods exported by a business are zero-rated (no VAT is charged), so no tax is paid up front.

Why Partner with INLIS Consulting

Navigating Portuguese VAT rules and tax filings can be complex. INLIS Consulting offers expert advice for anyone shopping, living, or doing business in Portugal. Their team can help you understand eligibility, meet refund requirements, or optimize VAT recovery for your company.

Whether you need a VAT refund for your purchases, guidance on Portuguese tax laws, or assistance with business registration, INLIS Consulting is a trusted local partner.

Contact INLIS Consulting today to ensure you maximize your tax savings and stay compliant with all Portuguese regulations.