How are expenses managed in Portugal?



Modified on: Mon, 22 Sep, 2025 at 2:39 PM

TABLE OF CONTENTS



At Horizons, we are committed to ensuring that expense reimbursement in Portugal is transparent, compliant, and straightforward. This guide outlines the key rules and best practices for managing business expenses in line with Portuguese law and company policy. 


Invoicing & Documentation Requirements

  • Mandatory Invoice Details:
    For tax-free reimbursement, invoices/receipts must show:
    • Supplier name, address, and NIF (Portuguese tax ID or foreign VAT number)
    • Buyer’s name and company NIF (Horizonte, Recursos Humanos, Portugal, UNIPESSOAL LDA)
  • Invoice Necessity:
    Invoices are always required unless the expense is very small (under €25, e.g., parking meters or local tolls), where simplified invoices are accepted.
  • Company Name on Invoices:
    Horizons must be listed on invoices for the expense to be reimbursed tax-free.


Reimbursement & Taxability

  • Examples of Tax-Free Business Expenses:
    • Travel (air, train, bus, taxis, mileage)
    • Accommodation (hotel invoices with company NIF)
    • Meals with clients/employees (subject to limits and documentation)
    • Work-related supplies (stationery, IT equipment, etc.)
  • Per Diems (Ajudas de Custo):
    • Domestic Travel (2025): €62.75/day (public sector benchmark)
    • International Travel (2025): Varies by country (e.g., €148/day for most EU destinations)
    • Tax-free if linked to travel outside the usual place of work, properly documented, and not excessive. Otherwise, per diems are considered taxable salary.
  • Client Entertainment & Gifts:
    • Deductible with proper invoices stating participants and business purpose.
    • Gifts above €50 per person/year may be considered taxable for the employee.
  • Health & Wellness Expenses:
    • Normally considered personal and non-deductible, unless specifically foreseen in company policy and treated as taxable benefits in kind.
  • VAT on Reimbursable Expenses:
    • VAT is applicable and can be reclaimed if invoices meet formal requirements and the expense is business-related (e.g., 23% on hotels/restaurants, 6% on transport, 23% on general goods).


Travel & Mileage Reimbursement

  • Mileage Reimbursement:
    Employees are reimbursed at €0.40 per km.
  • Parking Tickets & Tolls:
    These must be submitted as separate expenses with receipts. They are not included in the mileage reimbursement rate.
  • Travel Restrictions & Caps:
    All business travel must be directly linked to work purposes. There is no statutory monetary cap, but companies must justify the business relevance of each trip.
  • Specific Rules by Transport Type:
    • Air, Train, and Bus: Tickets must include the company’s NIF (Portuguese tax ID).
    • Taxi/Rideshare: Receipts are deductible with 6% VAT if the company NIF is included.
    • Rental Cars: Deductible if related to business travel. Passenger car rentals generally face restrictions on VAT deduction (usually non-deductible).


Additional Compliance Considerations

  • All expenses must be directly related to business activity and duly justified.
  • The Portuguese Tax Authority (AT) is strict about proper documentation (NIF, detailed invoices). Missing or invalid invoices can make reimbursements taxable as salary.
  • Companies should maintain clear expense policies and keep supporting documents for at least 10 years.



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