You invoiced 400 euros. The transfer says 372. Nothing went wrong, nobody shortchanged you, and the missing amount is not lost. It is simply that a Portuguese invoice has two moving parts pulling in opposite directions, and neither of them is the number you agreed with the client.
This is the article to read once, carefully, before the first invoice rather than after it.
The two moving parts
IVA is added on top. You add the applicable rate to your fee. That money is never yours. You collect it on behalf of the state and hand it over later.
Withholding is taken off. When you invoice a Portuguese company, that company keeps a slice as an advance on your income tax and pays it to the tax authority in your name.
So the base you agreed goes up because of one and down because of the other, and the transfer that lands is a third number that appears nowhere in your conversation with the client. Once you have seen it happen once it stops being alarming.
IVA, and why it is not your money
The exemption regime
Small activities can operate under an exemption, below a turnover threshold. While you are exempt you do not add IVA, and your invoice carries the legal mention explaining why. That mention is not optional decoration: without it an accounts department cannot tell an exempt invoice from an incorrect one.
The threshold moves. It is, without competition, the most out of date piece of advice circulating in creator groups, where somebody confidently quotes a figure they read three years ago. Check the current number at Portal das Financas and check it again each year.
Crossing the threshold
Going over is not a catastrophe, it is a change of regime. From that point you charge IVA, you can generally recover the IVA you pay on your own purchases, and your obligations get heavier.
The part that catches people out is commercial, not administrative. If your prices were built while exempt and you now add IVA on top, a client who is a private individual sees your price rise. A client that is a company does not care, because IVA is neutral for them. That difference is worth knowing before it arrives.
Withholding, and why it is not lost
Who withholds
A Portuguese company or another professional withholds. A private individual does not. Which is why an invoice to a business and an invoice to a person do not produce the same transfer, and why it is worth saying so when you quote, so nobody thinks you have two prices.
The withheld amount is paid to the tax authority under your name. At the annual return it counts in your favour. You are not losing it, you are paying part of your tax early, one invoice at a time.
What it does to your cash
It smooths the year and tightens the month. Your income arrives already partly taxed, which is comfortable in June. It also means the money you see is not the money you earned, and treating the transfer as your margin is how a good year turns into an unpleasant surprise.
Set aside a share of every invoice from the first one. Not because the tax will be brutal, but because the habit costs nothing when it starts and is painful to install later.
What the green receipt must carry
An invoice is not a note saying how much someone owes you. It is an accounting document, and a missing field is not a detail: it is a document the client's accounts department is not allowed to book. When they cannot book it, they do not pay it, and a three day project becomes a five week one.
| What has to appear | What happens when it is missing |
|---|---|
| Your name and tax number | The expense cannot be attributed to a supplier |
| The client's full tax details | The invoice cannot be matched to their records |
| A sequential number and a date | The document has no place in the accounting sequence |
| A real description of the service | "Services" alone gets questioned, and questions cost weeks |
| The taxable base, stated separately | Nobody can compute what they owe versus what they declare |
| The IVA rate and amount, or the exemption mention | The document reads as incorrect rather than exempt |
| The withholding, where it applies | The transfer will not reconcile with the invoice |
Describe the work in a way an outsider understands: three vertical videos, advertising rights for six months, one round of revisions. That line also protects you if there is ever a disagreement about what was bought.
Invoicing outside Portugal
This is where the rate goes up and where most mistakes happen, because the treatment changes with who the client is and where they are.
A company in the European Union
With a valid intra community VAT number, the service generally goes without Portuguese IVA and carries a reverse charge mention. You need to be registered for intra community operations, and you check that their number is valid before issuing rather than after.
A client outside the European Union
As a rule the service does not carry Portuguese IVA, but the transaction still exists, is declared and is filed. They may ask you for a form of their own country. None of this makes the invoice invisible, which is the assumption that surfaces two years later.
In every case, agree the currency before starting. If you invoice in one currency and are paid in another, somebody absorbs the conversion, and by default that somebody is you.
What you can deduct
Expenses genuinely used for the activity: equipment, software subscriptions, a proportion of your phone and internet, professional insurance, an accountant. The word doing the work in that sentence is "genuinely". A camera you use for client work is an expense; the same camera bought for holidays is not, and the difference matters if anyone ever asks.
Keep every invoice you issue and every invoice you receive. Not in a drawer: in one folder, named consistently, from the first month. Reconstructing a year of receipts in April is a special kind of misery and it is entirely avoidable.
The habit that makes this easy
Issue the invoice the day you deliver, not the day you remember. Payment terms only start counting from the invoice date, so a receipt written two weeks late is two weeks of your own money sitting in someone else's account.
And put the payment terms on the document itself. A date on the invoice converts a vague expectation into something you can point at, which is the entire difference between chasing politely and chasing awkwardly.
Keep reading
- UGC Usage Rights in Portugal: What You Are Actually Selling
- Opening Activity as a UGC Creator in Portugal
- UGC Creators in Lisbon
- Who Hires UGC Creators in Portugal
- The complete UGC guide for Portugal
Publish your creator profile →
Frequently asked questions
Why is the transfer smaller than the invoice?
Withholding was applied. It is an advance on your income tax and it counts in your favour at the annual return.
Do I add IVA from the first invoice?
Only if you are outside the exemption regime. Check the current threshold at Portal das Financas rather than trusting a forum answer.
Does a private client withhold?
No. Only companies and other professionals do, which is why the same fee produces two different transfers.
When should I issue the invoice?
The day you deliver. Payment terms run from the invoice date, not from the day the work was done.
Sources
Checked on 27 August 2026. Thresholds and rates change: where this guide and the official source disagree, the official source is right.