Portugal's Government Signs Off on EU Digital VAT Rules That Will Make Booking Platforms Collect Tax for Small Holiday-Let Hosts From July 2028
The Council of Ministers has approved a bill bringing the EU's VAT in the Digital Age package into Portuguese law. Platforms will collect VAT for small short-term rental hosts and ride drivers from July 2028, with cross-border digital reporting from 2030.
Portugal's Council of Ministers has approved a government bill (proposta de lei) that writes the EU's "VAT in the Digital Age" package, known as ViDA, into Portuguese law. The communiqué of the meeting held on Wednesday 11 November, published on 12 November, says the bill adapts national VAT (IVA) rules to the digital economy and to cross-border online trade.
The change that most residents will notice is not on their own tax return. It is on the bill for a holiday let or a ride booked through an app.
What the government says the bill does
The communiqué is short. It says the bill:
- consolidates the responsibility of online platforms for collecting VAT;
- sets taxation in the country of destination, where the customer is;
- improves the "one-stop shop" schemes (balcão único), through which a business can declare and pay in a single EU country the VAT it owes in other member states.
The government has not yet published the text of the bill, so the Portuguese details (any national options, the start date in Portugal) are not yet public.
The EU timetable
The package itself is fixed in Brussels. According to the European Commission's ViDA page, it was adopted on 11 March 2025, published in the EU Official Journal on 25 March 2025 as Council Directive (EU) 2025/516 with two regulations, and is being phased in until January 2035:
- From 14 April 2025: member states may make e-invoicing compulsory under specific conditions.
- From 1 January 2027: smaller clarifications for businesses using the One-Stop Shop (OSS) and Import One-Stop Shop (IOSS).
- From 1 July 2028: new "deemed supplier" rules for platforms in short-term accommodation rental and passenger transport by road, plus a wider single VAT registration.
- From 1 July 2030: real-time digital reporting, based on e-invoicing, for cross-border trade between businesses.
- By 1 January 2035: countries with their own real-time reporting systems must align them with the EU model.
What it means for you
If you let a flat as Alojamento Local (Portugal's licensed short-term rental regime) through a booking platform: the Commission says platforms will become responsible for collecting and paying the VAT when the host does not charge it, for example because the host is a small business or an individual. In practice the platform, not you, would account for that VAT on the stay.
If you drive for a ride-hailing app or book rides through one, the same rule applies to passenger transport by road.
If you sell to customers in other EU countries, the single registration lets more businesses meet their VAT duties through one online portal in one country, rather than registering in each.
For everyone else, the Commission says the move to e-invoicing and digital reporting should cut VAT fraud across the EU by up to 11 billion euros a year.
This is separate from the EU ministers' deal on parcels from non-EU sellers, which we covered on 10 November. Hosts can also read our piece on Airbnb's new house rules for Portugal.
