Most people that move to Portugal have previously only ever worked as employees which means they have never had experience of having to invoice a client before.
For those that have never issued them before, an invoice is an important document for fiscal purposes and is it may be used in investigations carried out by the revenue officials of Hacienda there are certain legal minimum requirements regarding the information that the invoice must contain:
The invoice must be identified as such and clearly contain the word ‘Factura’ (Invoice in Portuguese) without any additions. It must contain the date of emission and the date of carrying-out the activity if different from the date of emission.
The invoices must be numbered consecutively but the starting place or space between each number is irrelevant (001, 002, 003 or 1000, 1005, 1010).
Your fiscal details must be included – NIE number (or CIF if a company), registered address of the business.
Details of the Client – NIE or CIF and registered address. This is unnecessary if the client is not a business or other professional but an end consumer.
Discounts – if any, should be identified.
Base Amount charged – the net amount charged plus the IVA (VAT) including the rate charged.
Total Amount Charged – the previous quantities added together.
Any currency may be used but there must be a conversion into Euros. The invoice may be emitted in any form and there is no requirement for it to be stamped.
So as an example, if you are charging €1000 for a service, you would in fact invoice 1000€ + 23% IVA (VAT) – 15% IRPF (income tax) and therefore expect to receive €1080 (€1000 + €230 – €150 = €1080).
This means that you are effectively paying your tax as you go. At the end of each quarter your tax bill is calculated and any retentions you have already made are deducted from your final tax bill.
You will need also to keep any VAT you charge apart as you are responsible for paying this to the government at the end of each quarter. VAT received is balanced against any VAT paid on products and services required for the running of the business and any positive balance is payable.