Late on VAT: What Should I Do Now?
Introduction
Late on your VAT payment or periodic declaration filing? Don't panic. While missing tax deadlines has consequences, Portuguese legislation provides regularization mechanisms that can minimize the damage, especially if you act quickly.
This guide explains step by step what to do when you're late on VAT - from legal consequences to the best regularization strategies - all based on legislation in force in 2026.
What Are the VAT Deadlines in 2026?
First, let's review the legal deadlines. The frequency of VAT periodic declaration filing depends on the taxpayer's turnover:
| Regime | Turnover | Filing / Payment Deadline |
|---|---|---|
| Monthly | Over €650,000/year | By the 10th of the 2nd month following |
| Quarterly | Up to €650,000/year | By the 15th of the 2nd month after the quarter |
Legal basis: Articles 27 and 41 of the Portuguese VAT Code (CIVA).
What Are the Consequences of Being Late?
VAT delays can have several consequences, which worsen depending on time and amount owed:
1. Fine for late filing of the periodic declaration
Failure to file the VAT periodic declaration within the legal deadline constitutes a tax offense, punishable by a fine between €150 and €3,750, under Article 116(1) of the General Regime for Tax Offenses (RGIT).
2. Fine for non-payment of VAT
Failure to remit VAT to the State constitutes an offense under Article 114(1) and (2) of the RGIT. Fines vary according to the degree of fault and the nature of the taxpayer:
| Degree of Fault | Individual | Company |
|---|---|---|
| Negligent | 15% to 50% of tax owed (max. €22,500) | 30% to 100% of tax owed (max. €45,000) |
| Willful (up to 90 days) | 100% to 200% of tax owed (max. €82,000) | 200% to 400% of tax owed (max. €165,000) |
Note: Percentages are doubled for companies (Art. 26(4) of the RGIT). The minimum fine is €25.
3. Compensatory interest and late payment interest
In addition to fines, interest is charged on the amount owed. Compensatory interest is 4% per year (Art. 35 of the General Tax Law), calculated based on the number of days late. Late payment interest is also charged at an annually fixed rate.
4. Tax crime (most serious cases)
⚠️ WARNING: Risk of tax crime>
Failure to remit VAT to the State may constitute a tax crime when: the amount owed exceeds €7,500, more than 90 days have passed since the payment deadline, and the taxpayer has already been notified. In this case, the penalty can be up to 3 years imprisonment or a fine of up to 360 days (Art. 105 of the RGIT).
What to Do If You're Already Late?
Step 1: File the periodic declaration immediately
Even if late, you should submit the VAT periodic declaration on the Tax Portal as soon as possible. The sooner you file, the lower the fine. Spontaneous filing before any AT notification is always more favorable.
Step 2: Pay the outstanding tax
If you have VAT debt, proceed with immediate payment. You can do this through the Tax Portal by generating a multibanco payment reference. Voluntary payment before the initiation of offense proceedings can significantly reduce fines.
Step 3: Request an installment payment plan
If you cannot pay the full VAT debt at once, you can request an installment payment plan from the Tax Authority. The main requirements are:
Legal basis: Art. 196 of the CPPT and Order No. 6/2024-XXIII of the SEAAF. The request should be made before the initiation of tax enforcement for better conditions.
Step 4: Reduce the fine with voluntary payment
If the AT has already issued a notice or initiated offense proceedings, you can benefit from fine reductions:
Legal basis: Art. 29 and 30 of the RGIT. Spontaneous regularization is always the best option - act before being notified.
5 Strategies to Avoid Future Delays
1. Automate tax reminders
Use our tax calendar to receive alerts about VAT filing and payment deadlines. Never miss a deadline again.
2. Set aside VAT separately
Create a specific bank account to deposit VAT collected from clients. When payment time comes, the money will already be reserved.
3. Reconcile invoices monthly
Don't wait until the end of the quarter. Monthly reconciliation of issued and received invoices allows you to anticipate the VAT amount due and avoid surprises.
4. Work with a proactive accountant
An accountant who anticipates problems rather than just reacting makes all the difference. Learn how to choose the right accountant for your business.
5. Consider outsourcing accounting
If tax management is consuming too much time and energy, consider outsourcing your accounting. Focus on what you do best and leave tax deadlines to the experts.
Summary: Quick Action Guide
| Situation | What to Do | Consequence of Inaction |
|---|---|---|
| Declaration past due | File immediately on the Tax Portal | Fine of €150 to €3,750 |
| VAT unpaid | Pay voluntarily before being notified | Fine + compensatory interest (4%/year) |
| High debt | Request installment plan | Tax enforcement and asset seizure |
| Amount > €7,500 + 90 days | Regularize urgently and seek legal advice | Risk of tax crime (up to 3 years imprisonment) |
Conclusion
VAT delays are more common than you might think, especially among SMEs with irregular cash flows. The most important thing is to act quickly: file the declaration, pay the tax (or request installments) and regularize the situation before the AT takes enforcement measures.
Grupo Your is ready to help you resolve tax non-compliance situations and, more importantly, to prevent them from happening again. With proactive accounting support, tax deadlines are no longer a concern.
This article is for informational purposes only and does not replace consultation of applicable legislation or professional tax advice. The information refers to legislation in force as of February 2026 and may be subject to change. Contact us for a personalized analysis of your company's situation.
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