What is “IVAuacher project” in Portugal?

Portugal’s Ministry of Finance has launched the project to stimulate the spending of national citizens, as one of the ways to restore the tourism sector which has suffered enormously due to the Covid-19 pandemic. This economic move, which should come into effect on the 1st June 2021 introduces the possibility for the Tax registered persons in Portugal to use the spent VAT in hotels, restaurants, and cultural venues as the credit for later spending.

This project will be called “IVAuacher”, as the IVA in Portuguese stands for VAT.

Customers can decide whether to pay VAT on their receipt to the state or retain the amount as the credit to spend elsewhere in the tourist sector in the following quarter.

In the hotel sector, the VAT is 6%, in the restaurants and cultural venues 13%, rising to 23% on sales of alcohol, juices.

A specific initial mandatory requirement states that only tax-registered customers in Portugal can take advantage of this benefit introduced by the state.