Invoicing foreign clients from Portugal: faturas, receipts and VAT by client type

When I moved to Portugal and registered as a freelancer, the first thing I had to learn was how invoicing works here. It's different from Sweden, different from most of the EU, and nobody explains it well. I spent years using a workaround that turned out to be unnecessary. Here's what I wish someone had told me.

The simplified regime: how solo entrepreneurs work in Portugal

If you're a solo entrepreneur in Portugal (trabalhador independente), you're most likely on the regime simplificado (simplified regime). It's the default tax setup for freelancers and sole traders under a certain revenue threshold, and almost everyone starts here.

The thing to settle first: the Recibo Verde and a standard invoice followed by a separate receipt are both valid ways to invoice on the simplified regime. Whether you issue an invoice-receipt (Recibo Verde, FR series) or a standard invoice (fatura, FT series) followed by a receipt, you are using a normal, certified workflow. Which one fits depends on how your client pays.

Two ways to invoice

Portugal gives solo entrepreneurs two invoicing workflows:

Invoice-receipt (fatura-recibo, FR): the Recibo Verde. One document issued at the time of payment that serves as both invoice and receipt. This is what most solo entrepreneurs use for domestic clients. Simple, one step, done.

Invoice + receipt (fatura FT + recibo RG): a two-step process. You issue a standard invoice (fatura) within five business days of the work (Art. 36 CIVA) or, for an EU business client, by the 15th of the following month, and your client can put it through their accounts payable. Later, when payment arrives, you issue a separate receipt (recibo) to confirm payment. Both documents come from AT's own apps or from certified software.

Why the two-step process exists

The two-step process exists precisely for situations where your client needs an invoice before they can pay you, which is how most B2B works internationally.

When I finish a project for a client in Stockholm, their accounts payable team needs a document they can book as a payable. An invoice with a due date, my bank details, a line item breakdown. They enter it into their system, it gets approved, and payment goes out on the due date.

With the two-step process, I issue a fatura (FT series) through certified invoicing software. My client gets a proper, legally valid invoice they can process. When they pay, I issue a receipt (RG series) to close the transaction.

This is exactly how invoicing works in most of Europe. The only difference is that Portugal also offers the simpler one-step Recibo Verde for situations where invoicing and payment happen at the same time.

The workaround I used for years

Here's the part where I was wrong, and where I've heard many other freelancers repeat the same mistake.

I believed that issuing a standard fatura (FT) through certified software would put me in a worse tax position than waiting and issuing the Recibo Verde when payment arrived. So I avoided it. Instead, I sent clients an informal "commercial invoice" (a PDF I made myself, not through any certified system) and only issued the Recibo Verde when payment arrived.

My accountant told me to do this. Other freelancers told me the same thing. It became "what everyone does."

But the informal PDF was never necessary. A certified fatura (FT) is a normal, valid document on the simplified regime, and a certified receipt (RG) closes it when the money arrives.

The one effect of issuing a fatura that is easy to state is on VAT. On the normal VAT regime, VAT becomes chargeable when you issue the invoice. The invoice is due within five business days of the supply, or by the 15th of the following month for a service to an EU business, or on the payment date if you are paid in advance. Under the optional cash-VAT regime (IVA de caixa) it becomes chargeable when you are paid. An invoice to an EU business carries no Portuguese VAT.

VAT and foreign clients: the rules are different from domestic

This is where it gets genuinely complicated, and where most guides stop being useful. When you invoice a foreign client, the VAT rules change significantly depending on whether your client is a business or a consumer, and whether they're in the EU or outside it.

The two key questions: who is your client, and where are they?

EU business clients (B2B): reverse charge applies

If your client is a business (a taxable person) in another EU member state, Portuguese VAT does not apply to your invoice, and their EU VAT number checked in VIES is your evidence. This is the reverse charge mechanism (autoliquidação): the VAT liability shifts to your client, who accounts for it in their own country. Your invoice shows your Portuguese VAT number (PT + your NIF) and the client's EU VAT number, zero VAT charged, and the mention "IVA - autoliquidação" (Art. 36.º n.º 13 CIVA). Every invoice at 0% VAT also needs an exemption code: for this case it is M40 (code 115 in the AT portal).

This is a common scenario for Portuguese freelancers working with EU clients.

Reporting depends on your VAT regime. On the normal VAT regime, you declare these B2B EU service sales in your Declaração Periódica (periodic VAT return), in campo 7 of Quadro 06, each month or quarter, and you also submit a Declaração Recapitulativa (recapitulative statement) listing each EU client's VAT number and the total invoiced amount for the period. Under the Article 53 exemption you file neither for these sales (the recapitulative statement is no longer required for operations from 1 July 2025 onward).

EU consumer clients (B2C): Portuguese VAT applies, with exceptions

If your client is a private individual in another EU country, the default rule is that Portuguese VAT applies to your invoice. You charge the Portuguese rate that applies to your service and remit it to the Portuguese tax authority.

The main exception is for electronically supplied services and distance sales of goods (Art. 6.º-A CIVA): if your cross-border B2C sales of those to consumers in other EU countries stay below the EU yearly threshold, you keep charging Portuguese VAT. Above it, you charge the VAT of each customer's country, and the OSS (One Stop Shop) scheme lets you report it all in one place.

For most Portuguese freelancers doing B2B work, this rarely applies. If you're selling digital products or services directly to consumers across the EU, talk to an accountant about OSS.

Non-EU clients: business clients get 0% VAT, private clients depend on the service

If your client is a business in a non-EU country (the US, UK post-Brexit, Switzerland, Brazil, etc.), you charge 0% VAT, and the invoice carries the same "IVA - autoliquidação" mention and exemption code M40 as for EU businesses. On the normal VAT regime the sale is also declared in your periodic return, in campo 8 of Quadro 06. If your client is a private individual outside the EU, whether Portuguese VAT applies depends on the service, so check with an accountant.

Invoicing a US startup or a UK agency? 0% VAT, with the mention and the code on the invoice.

Art. 53 VAT exemption: a common point of confusion

Many Portuguese freelancers are VAT-exempt under Article 53 of the VAT Code (regime de isenção), which applies if your annual turnover stays below €15,000.00. If you're in this regime, you charge no VAT to anyone, foreign or domestic, as long as you don't export goods outside the EU.

One detail: a service you supply to a business client in another EU country is outside Portuguese VAT, so its invoice carries code M40 (portal code 115) rather than the Art. 53 exemption code. Whether that revenue counts toward your Art. 53 threshold is worth confirming with a Portuguese accountant before you assume it doesn't.

Why the workaround persists

I think the confusion comes from a few places:

Treating a fatura as a tax event in itself. VAT on the normal regime has its own timing, set out above. That is a reason to plan your invoice dates, not a reason to avoid certified invoices.

The Recibo Verde's elegance. The Recibo Verde is genuinely clever, one document, one step, everything handled. It's natural to assume it must be doing something special that a regular fatura doesn't. But a regular certified fatura plus receipt is just as valid.

Accountants recommending the path of least resistance. The "commercial invoice + Recibo Verde" workaround is familiar, so accountants keep recommending it. But familiar and necessary are different things.

What you should actually do

If you're a solo entrepreneur in Portugal invoicing foreign clients:

1. Issue a proper fatura (FT series), through AT's apps or certified invoicing software, within five business days of the work (or, for an EU business client, by the 15th of the following month), when your client needs an invoice before payment.
2. For EU business clients, add their EU VAT number, charge 0% VAT, note "IVA - autoliquidação" and use exemption code M40. If you are in the normal VAT regime, report in your periodic VAT return and recapitulative statement.
3. For non-EU business clients, charge 0% VAT with the same "IVA - autoliquidação" mention and code M40. For private individuals, check with an accountant first.
4. When payment arrives, issue a receipt (RG series).

For domestic clients where invoicing and payment happen together, continue using Recibos Verdes (FR series) through the Portal das Finanças. It's simpler and achieves the same thing in one step.

The only administrative overhead of the two-step process is that you need to remember to issue the receipt when payment arrives. That's it. That's the entire trade-off, and the receipt is not optional: as a freelancer you must issue one for every amount you receive (CIRS Art. 115.º).

The bottom line

You don't need a workaround to invoice foreign clients. Use the two-step process (fatura + receipt) through certified software.

The VAT side is more nuanced: EU B2B clients get reverse charge (0% VAT, the "IVA - autoliquidação" mention, and reporting on the normal regime), non-EU business clients get the same 0% treatment, and EU consumers generally get Portuguese VAT unless the electronic-services threshold applies. If you're under Art. 53, you charge no VAT, as long as you don't export goods outside the EU. But these are the actual rules, not complications introduced by using the right document type.

The system works. It just took me a few years to realize it.

Related: VAT in Portugal as a solo entrepreneur, the full breakdown of when you charge VAT, when you don't, and which exemption code to use.

Related: Why every freelancer in Portugal talks about "green receipts", the history of the Recibo Verde.

Related: Best invoicing software for Portuguese freelancers in 2026, how to pick AT-certified software that handles both domestic and foreign-client workflows.

Related: How to invoice a foreign client in English from Portugal, why the free government tools can't produce an English document even though their interface has an English toggle.