Labor & Taxes
6% VAT in construction could lead to additional tax bills in a few years, accountants warn
The Order of Certified Accountants (OCC) has requested that the government clarify the application of the 6% VAT rate on construction projects. The current rules rely on conditions—such as the final sale price or rent—that can only be verified after the work is complete, creating a risk that the tax authority could retroactively demand the difference between the 6% reduced rate and the standard 23% rate, plus interest and potential penalties, in future audits.
Why it matters
If you are involved in housing construction or renovation benefiting from the 6% VAT rate, you currently face legal uncertainty; future tax audits could potentially demand back taxes if the documentation does not definitively meet the criteria at the time of each invoice.CNN PortugalRead original ↗
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