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End of VAT Exemption in the Transmission of Sugar, Oils and Soaps

We hereby inform the business community and other interested parties that as of 31 December, 2023, the VAT exemption provided for in Article 9, paragraph 13 of the Value Added Tax Code[1], has ended for the transfer of (i) sugar, (ii) raw materials, intermediate products, parts, equipment, and components for the sugar industry, (iii) oils and soaps, (iv) goods resulting from the industrial activity of edible oil and soap production, carried out by their respective factories, (v) goods to be used as raw materials in the oils and soaps industry, listed in the Customs Tariff and detailed in Annex II, which is an integral part of the VAT Code, and (vi) goods and services provided in connection with the agricultural activity of sugarcane production intended for the industry.

The General Directorate of Taxes issued a Circular with reference No. 01/AT/DGI-GDG/132/2024, dated 15 January, 2024 reminding of the end of the exemption.

It is emphasized that the aforementioned exemption was temporary, with its termination foreseen for 31 December, 2023. Thus, the taxpayers transferring the aforementioned goods and services must, as of 01 January, 2024, charge VAT at the rate of 16% on both, existing stock and stock to be acquired or produced, in order to channel the applicable tax to the State Treasury.

[1] Code approved by Law No. 32/2007, of 31 December, amended and republished by Law No. 13/2016, of 30 December and, amended by Law No. 16/2020, of 23 December (VAT Code).