Credit Note
Nota de Crédito
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The English name for Nota de Crédito, a certified document that reverses all or part of an issued invoice when the amount or the VAT changes. Cancelling the invoice is a separate act.
"Credit note" is the standard English term for what Portugal calls a Nota de Crédito: a document that undoes all or part of a previously issued invoice. If you've freelanced or run a business anywhere in Europe, you've probably encountered credit notes before. Portugal's version works the same way conceptually, but with stricter rules around certification and traceability.
Why credit notes exist in Portugal
Portuguese invoicing follows one unbreakable rule: issued documents are permanent. You cannot edit an invoice after issuing it. You cannot delete it. The tax authority (AT) gets a record of it, in real time or by the 5th of the following month depending on how your software reports, and the document chain must remain intact.
So when the money is wrong, you typed the wrong amount, the client returned the goods, the project was cancelled after you had billed it, a credit note is the correction. It's the system's built-in mechanism for that.
It is not the only one, and that trips people up. When the amount and the VAT are both right and something else is wrong, a misspelled name, the wrong NIF, a description that doesn't match, you cancel the invoice and issue a corrected one. Same when the sale never happened at all. The Nota de Crédito entry has the dividing line in full.
What makes it different from other countries
In many countries, a credit note is an informal commercial document. In Portugal, it's a certified fiscal document with the same legal weight as an invoice. It must be:
- Issued through AT-certified invoicing software
- Sequentially numbered in its own series (NC)
- Digitally signed as part of the document chain
- Reported to the tax authority
This means you can't draw one up in a spreadsheet. It has to come out of the same certified system as your faturas, though once it exists, emailing the PDF to your client is ordinary practice.
Partial vs full credit notes
A credit note can reverse an invoice partially or fully. If you invoiced 1,000 euros but should have invoiced 800, you issue an NC for 200 euros referencing the original. If the client returns everything they bought, you issue one for the full amount.
What a full credit note is not is a way to make an invoice go away. AT is explicit that a credit note must not be used as an instrument for cancelling invoices. If the sale came undone, credit it. If it was never a sale, cancel it.
Either way, the original invoice remains in the system. The credit note doesn't erase it, it adds a correction on top. The tax authority holds both documents; you declare the net position yourself, and taking the VAT back is optional and conditioned on proof the client knew about the correction.
For the full details on how Notas de Crédito work in Portuguese tax law, see the Nota de Crédito glossary entry.
Perguntas frequentes
What is a credit note in Portuguese invoicing?
A credit note (Nota de Crédito, NC series) is a certified fiscal document that corrects a previously issued invoice. In Portugal, invoices are permanent, you can't edit or delete them. A credit note is how you reverse an overcharge or account for a sale that was undone. It is not how you cancel an invoice, which is a separate act.
Is a Portuguese credit note the same as in other countries?
The concept is the same (a document that reverses an invoice) but in Portugal it's a certified document issued through AT-certified software, sequentially numbered, and reported to the tax authority. It's not just a commercial courtesy; it's a legal fiscal event.
Do I need a reason to issue a credit note?
Yes. A correction has to say what it is correcting: a pricing error, a service cancellation, goods returned. You can't issue a blank or unexplained credit note. A duplicate invoice most likely is not one of these: the second document has no supply of its own behind it, so it gets cancelled instead. AT has not addressed duplicates directly, so that part is a reading rather than a rule.
When should I cancel the invoice instead of issuing a credit note?
When the taxable amount and the VAT are both correct and something else is wrong, a misspelled name, the wrong NIF, a description that doesn't match, you cancel the invoice and issue a corrected one. Same if the sale never happened. A job billed twice most likely belongs there too, though AT has not addressed duplicates directly. The credit note is for a real sale that was later undone or reduced.
Does a credit note trigger a refund?
It depends on whether the client already paid. If the invoice is still outstanding, the credit note reduces the balance. If it was already settled, it creates a refund obligation and you owe the client money back. That turns on whether the money actually moved, not on the document type.
How does a credit note affect my taxes?
It reduces your reported revenue for the period. The VAT side is not automatic: regularising in your own favour is optional, and Art. 78.º n.º 5 CIVA conditions it on holding proof the client knew about the correction or was reimbursed. AT holds both documents, but you declare the net position yourself.