Self-Billing in Portugal: How It Works with Online Payments

Self-billing allows the customer to issue an invoice in the supplier's name and on the supplier's behalf. Under the general regime, it requires a prior written agreement, proof that the supplier knew of and accepted each document, and the statutory wording autofaturação (“self-billing”). An online payment can feed the process, but does not create the agreement or decide VAT.

What is self-billing in Portugal?

In self-billing, the party buying the goods or services prepares the invoice that documents the supplier's sale. Article 29(14) of the Portuguese VAT Code allows the invoice to be prepared by the customer or by a third party, but always in the name and on behalf of the taxable person that carried out the transaction. The supplier therefore remains the party that carried out the documented supply.

This model is useful when the customer already calculates the amounts it owes to many suppliers. Consider a platform that buys a service from a professional and calculates that €320 is payable at the end of the month. If the platform is genuinely the customer for that service and the required agreement exists, it can prepare the invoice in the professional's name to document the purchase.

The existence of a platform or payment is not enough. A marketplace that merely connects a seller with the final consumer might not be the customer in the sale. Before configuring self-billing, the parties must identify who supplies, who buys, and which transaction the invoice documents. The flow of funds does not replace that analysis.

Is self-billing the same as billing yourself?

No. The term describes who prepares the document, not a sale by an entity to itself. The transaction always has two positions: the supplier, in whose name the invoice is issued, and the customer, which prepares it under the agreement. Confusing these positions changes the meaning of the document.

Two documents can coexist in a marketplace. The self-billed invoice records the service that the supplier sold to the platform, while a separate invoice records the fee that the platform charged the supplier. The net amount transferred may be the difference between the two, but it must not be treated as the value of a single transaction.

Can self-billing be used without an agreement?

Under the general regime, no. Article 36(11) of the Portuguese VAT Code imposes three cumulative conditions: a prior written agreement between supplier and customer, proof that the supplier knew that the invoice had been issued and accepted its contents, and inclusion of the wording autofaturação (“self-billing”) on the invoice. An oral agreement or a clause presented after the first issue does not meet the prior-agreement requirement.

The agreement does not replace acceptance of the documents. For example, a contract clause can authorise the platform to prepare self-billed invoices, but the process must still produce proof that the supplier knew of the March invoice and accepted its amounts and contents. A bank transfer on its own proves payment, not necessarily knowledge and acceptance of the invoice.

Article 29(15) provides special situations where the law requires the customer to issue certain invoices and disapplies the conditions in Article 36(11). The Portuguese Tax Authority FAQ covers, for example, specific purchases of waste, certain forest products, and surplus electricity. These statutory exceptions must not be generalised to an ordinary marketplace.

What must a self-billing agreement prove?

The law sets the essential conditions but does not provide one model contract for every business. An operational procedure should make those conditions verifiable and prevent the evidence from being spread across messages or spreadsheets. Before the first invoice, it should record at least the following points:

1. Identify the supplier and customer, and the transactions covered by the agreement. Generic consent to receive payments is not authorisation for self-billing.

2. Define how the supplier receives each document and accepts or disputes its contents. The record must link the response to the specific version of the invoice.

3. Establish who reports the documents to the Tax Authority. According to its FAQ, the customer can fulfil that obligation if the prior agreement grants it that role.

4. Define how differences, cancellations, and corrections are handled. A change to the price, VAT, or the parties' identity must not erase the version already issued or its evidence.

5. Retain the agreement, the document sent, and evidence of knowledge and acceptance in a form that links them to the corresponding purchase and payment.

Who is responsible for each part of self-billing?

Self-billing does not exchange the parties' tax identities. The customer takes on preparation of the document in the supplier's name; it does not become the supplier in that transaction. The practical division must be explicit, particularly where a platform, invoicing software, and a payment provider all participate in the same flow.

How does VAT work on a self-billed invoice?

Self-billing changes who prepares the invoice; it does not create a different VAT rate. The document must reflect the treatment applicable to the actual transaction and contain the other required details. The card's location, currency, or a country inferred from the payment is not a sufficient basis for selecting a rate or exemption.

The wording autofaturação is also not the same as IVA - autoliquidação (“reverse charge”). Article 36(13) reserves the latter wording for transactions where the customer is liable for the tax. A customer can prepare an invoice without VAT reverse charge applying, or both situations can apply when the rules governing the transaction require them.

In a cross-border sale of digital services, for example, the validity of a VAT number, the customer's business status, and the place of supply must be handled before issue. The guide to VAT on digital services, reverse charge, VIES, and OSS explains those rules. Self-billing must not be used to infer them automatically from the payment.

Who reports a self-billed invoice, and how does SAF-T fit in?

The reporting obligation does not automatically pass to the customer merely because it prepared the invoice. The Tax Authority FAQ explains that the customer can report the documents when the prior self-billing agreement grants it that role. Without that assignment, the supplier retains the reporting process described by the Authority.

When the customer reports, the Authority provides a web service and the upload of a document-reporting file structured on SAF-T (PT). When the supplier remains responsible, it can use the file supplied by the customer or enter the invoice directly in the Finance Portal, marking it as self-billing. The chosen option must match the agreement and the system actually in use.

The file does not replace the agreement, acceptance, or accounting. The same self-billed invoice must retain a verifiable link between supplier, purchase, document, report, and payment. The guide to automating invoicing for Stripe payments in Portugal shows how to separate payment collection, issue, and reconciliation.

How do online marketplaces implement a self-billing flow?

1. Confirm the contract and the platform's role. There must be a real purchase between the supplier and the entity that intends to prepare the invoice.

2. Enter into the written agreement before the first issue and define the knowledge, acceptance, and reporting procedure in it.

3. Collect the required tax details through an appropriate channel and confirm the treatment of the transaction. A NIF or VAT rule must not be completed by inference.

4. Calculate the gross purchase value, configured taxes, and adjustments. The platform fee and net payout must remain identifiable rather than being combined.

5. Prepare the invoice in the supplier's name and on its behalf, include the wording autofaturação, and meet the document's other requirements.

6. Notify the supplier, record acceptance of the contents, and route any discrepancy for correction before closing reconciliation.

7. Report through the party and channel defined in the agreement, link the Authority's response to the document, and reconcile the self-billed invoice with the payment.

A processor receipt, payout statement, or spreadsheet can help check amounts, but none of them creates a valid self-billed invoice by itself. The separation between payment and tax document is also explained in the guide to the validity of Stripe invoices and receipts in Portugal.

Which controls prevent self-billing errors?

Five questions should be answered before issue: is the entity genuinely the customer, was the agreement already in force, will the supplier be notified, will acceptance be demonstrable, and is responsibility for reporting defined? If an answer is missing, the payment should remain reconcilable without forcing automatic issue.

After issue, compare the accepted contents, gross purchase value, any fee, amount paid, and reporting status. This control preserves the essential distinction: a platform can automate tasks and evidence, but self-billing still documents a real transaction between two identified parties.