What VAT rates apply to hotels and restaurants in Portugal?

Portugal applies differentiated VAT rates in hospitality: 6% for accommodation and non-alcoholic drinks, 13% for wine and alcoholic beverages during meals, 23% for minibar and bar services. Understanding these rates is critical to avoid VAT errors in hospitality accounting.

What is local accommodation (Alojamento Local) in Portugal?

Local accommodation (AL) is Portugal's short-term rental category (including Airbnb, VRBO). It requires registration in the RNAL, certified invoicing software, monthly SAF-T reporting to the Tax Authority, 6% VAT on stays, and income taxation under IRS (individuals) or IRC (companies).

What are the tourist taxes in Portugal?

Portugal has a 6% VAT on accommodation. Additionally, several municipalities charge a tourism tax: Lisbon (€2.00/night), Porto (€2.00/night), Cascais (€1.50/night). Property owners also pay annual IMI (property tax) on the accommodation property.

Accounting for Hospitality & Tourism Portugal

Accounting for Hospitality & Tourism

Portugal's hospitality and tourism sector is one of the most dynamic in Europe — and one of the most tax-complex. Differentiated VAT rates, mandatory certified invoicing, SAF-T reporting, seasonal payroll and Alojamento Local licensing all create compliance challenges that general accountants often handle poorly. HVR specialises in accounting for hotels, restaurants, local accommodation operators and tourism businesses, combining deep sector knowledge with English-language service for international operators.

VAT Cash Accounting Regime

Hospitality businesses in Portugal with annual turnover below €2 million may opt for the VAT cash accounting regime (regime de IVA de caixa). Under this scheme, VAT only becomes due when the client actually pays — not when the invoice is issued. This is a significant cash-flow advantage for hotels and restaurants dealing with OTA platforms (Booking.com, Expedia) that settle weeks after the guest's stay. HVR registers eligible clients under this regime and manages the more complex reconciliation it requires.

Certified Invoicing and ATCUD Codes

All Portuguese businesses issuing invoices — including hospitality operators — must use certified invoicing software approved by the Tax Authority (AT). Since 2023, every invoice must carry a unique ATCUD validation code generated by the AT. Invoices without a valid ATCUD code are not legally compliant and cannot be used by clients to recover VAT. HVR sets up your certified software, obtains your ATCUD series from the AT portal, and ensures your invoicing workflow meets all legal requirements from day one.

SAF-T Reporting

Every month, hospitality businesses must submit a SAF-T (Standard Audit File for Tax) to the Portuguese Tax Authority containing all invoicing and accounting data for the previous month. This file must be generated by certified software and submitted by the 20th of the following month. Errors or late submissions attract automatic penalties. HVR prepares and submits your monthly SAF-T file as part of every accounting package, eliminating the risk of missed deadlines.

VAT Rates in Hospitality

Portugal applies three different VAT rates within a single hospitality operation, which frequently leads to errors in accounting and invoicing:

6% reduced rate: accommodation (hotel stays, Alojamento Local), non-alcoholic beverages consumed during meals
13% intermediate rate: wine and alcoholic beverages served at the table during meals
23% standard rate: bar services, minibar, room service with alcoholic drinks, spa treatments, parking

Correctly splitting revenue across these categories in your PMS (property management system) and accounting software is essential for accurate VAT declarations. HVR audits your invoicing setup to ensure every revenue line is coded at the correct rate.

Alojamento Local Licensing and Compliance

Alojamento Local (AL) — Portugal's short-term rental category covering Airbnb, VRBO and similar platforms — requires specific licensing and ongoing compliance:

Registration in the RNAL (Registo Nacional de Alojamento Local) and display of the AL licence number on all platforms
Certified invoicing software with ATCUD codes for every guest invoice
Monthly SAF-T submission to the Tax Authority
6% VAT on accommodation revenue (VAT registration required above the €14,500 annual threshold)
Municipal tourist tax collection and remittance (Lisbon €2/night, Porto €2/night, Cascais €1.50/night)
Income tax filing: IRS Category B for individuals, IRC for companies

HVR manages the full AL compliance cycle, from initial RNAL registration to monthly filings and annual tax returns.

Seasonal Cash Flow and Payroll

Hotels and restaurants face pronounced seasonal revenue patterns that require careful cash-flow planning to meet tax payment obligations during off-peak months. HVR prepares monthly cash-flow forecasts calibrated to your business's seasonal profile, ensuring you always have sufficient reserves for IVA payments, social security contributions and annual IRC instalments. Our payroll service handles the complexity of shift workers, public holiday supplements, tips and service charges — all correctly categorised for IRS withholding and social security purposes.

Food Cost Control

For restaurants and catering operations, accurate food cost accounting is as important as tax compliance. HVR sets up cost-centre accounting that tracks purchases by category (food, beverages, consumables), calculates monthly food cost ratios against revenue, and flags deviations from target margins. This analytical layer transforms your accounting from a compliance exercise into a genuine management tool.