Recibos Verdes — Complete Guide
Recibos Verdes (green receipts) is Portugal's self-employment system. If you freelance, consult, or work as an independent contractor, this is how you invoice and pay tax. It's simpler than forming a company but has its own obligations.
Open activity at Financas
Portal das Financas > Cidadaos > Atividade > Inicio de Atividade. Select your CAE code (business activity classification), expected annual income, and whether you'll charge IVA.
Understand IVA (VAT) rules
Exempt if annual turnover under 14,500 EUR (simplified regime). Above that: charge 23% IVA (standard rate), submit IVA declarations quarterly (or monthly if turnover > 650K EUR). If your clients are in other EU countries, you may need to register for VIES (reverse charge).
Issue Recibos Verdes for each payment
Portal das Financas > Faturas e Recibos > Emitir. Enter client details, amount, and service description. Issue the receipt when you receive payment (not when you invoice).
Register for Social Security
Mandatory within 12 months of your first Recibo Verde. First 12 months are exempt from contributions. After that, contributions are calculated quarterly based on declared income (~21.4% of 70% of your income).
Submit quarterly Social Security declarations
Every January, April, July, and October — declare your income from the previous quarter via Seguranca Social Direta. Your contribution amount adjusts accordingly.
Withhold IRS (income tax) if required
If your clients are companies, they may withhold 25% IRS at source. If you invoice individuals or foreign companies, no withholding — but you must save for your annual tax bill.
File annual IRS declaration
Include all Recibos Verdes income in Anexo B of your IRS declaration (April-June). Deductible expenses depend on whether you're in the simplified or organized regime.
Watch out
- ●The simplified regime (default) allows 75% of income to be taxed for services (25% automatic deduction) — but only if you have sufficient expenses in e-Fatura
- ●Missing a quarterly Social Security declaration results in being assessed at the maximum rate
- ●Keep all receipts for business expenses — you'll need them for IRS deductions
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