In July 2024, the Portuguese Government adopted 15 measures to combat digital bureaucracy and simplify the interactions between citizens and public administrations. The measures are not centred on public administration efficiency but rather on the impact they will have on citizens and companies.

One of these measures aims at simplifying VAT exemption claims for the export of low-value consignments (not exceeding 1000 €) in order to lessen the administrative burden on businesses while facilitating the work of the Tax and Customs Authority. The measure should translate into an increase in the number of these exports while decreasing the costs associated with them.

The legal framework in Portugal is based on the Union Customs Code (UCC) and its delegated and implementing acts which form the framework for Customs rules and procedures within the European Union (EU). To export a shipment using the service of a postal operator (postal consignment) or an express carrier (express consignment), the general rule is the submission of a Customs export declaration. This declaration can be standardized or simplified, or it can even take the form of an entry in the declarant’s records, and it must be submitted with sufficient advance notice to allow authorities to conduct risk analysis for security and safety purposes.

However, specific formalities apply to consignments which contain goods whose intrinsic value at import does not exceed 1,000 euro and which are not subject to a special formality provided for in EU legislation which the Customs authorities are required to apply (restrictions, prohibitions, excise, etc.). Such low-value consignments are not subject to Customs duties or to risk analysis for security and safety purposes; they are exempt from the requirement to submit a prior exit declaration – or exit summary declaration – and a formal Customs declaration is not required to export them.

It is a fundamental principle of value-added tax (VAT) in the EU that exports do not bear VAT. In order to prove that the export took place, economic operators usually submit a Customs export declaration. As a result, even where formalities do not require it, as in the case of low-value consignments, Customs declarations are submitted, and the bureaucratic burden and administrative costs remain the same for both the Customs Administration and the economic operators.

The challenge was therefore to devise a way for Customs to issue a document proving the export and allowing the exporter to complete the entire process electronically without resorting to a formal Customs export declaration.

Postal consignments are considered declared for export upon their exit from the Customs territory of the European Union. As for express consignments, they are considered declared for export upon their presentation at the Customs office of exit, provided that the data contained in the transport document and/or the invoice are made available to and accepted by the Customs authorities.

There is no common data set defined in the UCC framework for the presentation of the goods in the case of exports of goods in express consignments. In Portugal, the Customs Administration requires access to information contained in the cargo manifest; to that end, it has implemented an IT system enabling carriers or their representatives to provide information related to transport means as well as sea and air cargo manifests electronically. The said system is connected to the Automated Export System (AES) though which export and exit formalities are carried out. By cross-referencing the information provided, the system and the AES both notify the Administration of the exit of the goods from the Customs territory of the European Union when they are loaded at national ports or airports.

The Customs Administration decided to also make use of the system to issue a document certifying the exit of the goods called the “VAT Export Form”.

In the initial stage of the process, which was designed by a multidisciplinary team of experts, the exporters submit invoices to the Customs authority. There are various reasons for choosing this type of document. Invoices are documents that exporters must produce for each transfer of goods or provision of services, regardless of the quality of the goods’ acquirer or the services’ recipient, even if the latter does not request one. They must contain a set of legally defined elements which are the same for all parties concerned. Finally, they must already be communicated to the national Tax and Customs Authority via electronic data transmission.

The process is as follows:

1. At the time of sale, the exporter, upon issuing the invoice, sends the invoice details to Customs via electronic data transmission, either by uploading the document via a web interface or by implementing a software application in its accounting system to forward information to the Administration’s IT system.
2. In return, the exporter receives a registration number to be communicated to the carrier, in the manner agreed between them, possibly annotated on the shipment itself.
3. a. If the carrier is the postal operator, the latter sends an electronic message to Customs containing relevant shipment details, namely the weight, volumes and exit date, and well as the registration number.

b. If the carrier is an express carrier, the latter should include the registration number in the cargo manifest which it must transmit electronically to the Customs Administration.

4. Based on the information received (3a or 3b), the Customs system automatically issues the “document certifying exit”.

The project was presented to business confederations, express carriers and the postal operator. Their input was, in turn, incorporated into the final design of the solution which is expected to be completed by the end of the first half of 2025.

All stakeholders recognized that this solution should enable businesses operating from Portugal to lower their administrative costs and speed up delivery times, thereby improving their competitiveness. It should also lead to a considerable rationalization of the resources involved on the part of the Administration and an increased capacity to both supervise and measure e-commerce export operations.

More information
fernando.campos.pereira@at.gov.pt