Recibos Verdes in Portugal Explained
Working as a freelancer in Portugal requires understanding the Recibos Verdes system, which is the official framework for self-employment in the country. For foreigners planning to relocate and work independently, this system defines how income is declared, how taxes are paid, and what legal obligations apply.
This guide explains how Recibos Verdes in Portugal work, how to register as a freelancer, and what rights and responsibilities you should be aware of before starting your activity.
Understanding Recibos Verdes in Portugal
Recibos Verdes are digital invoices issued by self-employed professionals to report services provided and income earned. These electronic receipts must be issued through the Portuguese Tax Authority portal and are the basis for calculating income tax, VAT and Social Security contributions.
This system applies to anyone working independently and receiving payment directly from clients.
Who Uses Recibos Verdes
Recibos Verdes are used by a wide range of professionals, including foreign freelancers relocating to Portugal, consultants, remote service providers, digital nomads, content creators and liberal professionals such as architects, psychologists and translators.
If you provide services independently and invoice clients directly, issuing Recibos Verdes is mandatory.
Registering as a Freelancer in Portugal
Obtaining a NIF
The first step to working legally in Portugal is obtaining a NIF (Número de Identificação Fiscal). This tax number is required not only to work as a freelancer but also to open a bank account, rent accommodation and sign contracts.
OnCorporate can assist with the NIF process.
Opening Activity With the Tax Authority
Once the NIF is issued, the freelancer must register their activity with the Portuguese Tax Authority. This process includes selecting the correct activity code, estimating annual income and defining the VAT regime.
Many freelancers qualify for VAT exemption under Article 53 if annual income does not exceed €12,500. Registration can be completed online through the Tax Authority portal.
If you prefer professional support, OnCorporate offers assistance with freelancer registration.
Issuing Recibos Verdes
After the activity is registered, Recibos Verdes can be issued electronically for each service provided. Each receipt must include client details, service description, the amount received and applicable taxes such as VAT or withholding tax.
Freelancers can issue digital receipts through the Tax Authority’s platform.
OnCorporate can guide you in setting up your billing and compliance systems.
Taxation: VAT and Income Tax
VAT (IVA)
Freelancers earning under €12,500 per year may benefit from VAT exemption. Above this threshold, VAT must be charged and periodic VAT returns must be submitted.
OnCorporate can support VAT compliance.
Withholding Tax (IRS)
Withholding tax represents an advance payment on income tax. The standard rate for freelancers is 25%, although exemptions and specific rules may apply depending on the type of activity and income level.
Social Security Contributions
After the first 12 months of activity, freelancers are required to contribute to Portuguese Social Security. The standard contribution rate is 21.4% of relevant income, although exemptions and reductions may apply in specific situations.
These contributions provide access to benefits such as healthcare coverage, parental leave, sickness allowance and future pension rights.
More information is available at Social Security website.
For help understanding contributions, visit OnCorporate website.
Working With Recibos Verdes as a Foreigner
The Recibos Verdes system can seem complex at first, especially for foreigners, but with proper planning and professional support, it becomes manageable. The system offers flexibility, the ability to work with international clients and relatively low operating costs compared to many other countries.
Understanding Recibos Verdes in Portugal is essential for anyone planning to work as a freelancer in the country. Proper registration, tax compliance and early preparation help ensure a smooth transition and long-term legal security.
Need Support Working as a Freelancer in Portugal?
OnCorporate supports foreign freelancers with:
- NIF application
- Freelancer registration
- Issuing Recibos Verdes
- VAT, IRS and Social Security compliance
- Tax planning for international professionals
🔗 Get in touch with OnCorporate and start your freelance journey in Portugal with confidence.
