Law extends VAT reverse charge to the entire liquid fuels chain

Law No. 65/2026, published by the Diário da República on November 5 (1st series, no. 215), extends the reverse charge mechanism of VAT to all transfers of gasoline, diesel, and fuel oil and strengthens certification and traceability within the National Petroleum System (SPN). The Assembly of the Republic decree adds articles 75.º-A to 75.º-C to the VAT Code and amends Decree-Law No. 31/2006, of February 15, with fines reaching 1 million euros for legal entities.

The law was approved on October 9, 2026, promulgated on October 30 by the President of the Republic, António José Martins Seguro, and countersigned on November 2 by the Prime Minister, Luís Montenegro; the signature of the President of the Assembly of the Republic is that of José Pedro Aguiar-Branco. The decree amends the VAT Code and the Excise Duty Code and introduces the fifth amendment to Decree-Law No. 31/2006, which establishes the general principles of organization and operation of the SPN and regulates the storage, transport, distribution, refining, and marketing of crude oil and petroleum products.

The extension covers transfers carried out by operators with the status of registered consignee, temporary registered consignee, or certified consignee, as provided for in articles 29, 30, and 60-A of the Excise Duty Code.

Tax reversal throughout the entire chain

The new article 75.º-A of the VAT Code considers as taxable persons the individuals or legal entities who carry out operations that grant the right to full or partial deduction and who are acquirers, within the national territory, of gasoline, diesel, and fuel oil whose release for consumption was carried out by an operator with one of those three statuses.

The rule applies to all successive transfers of fuels, from the release for consumption to the last operator in the chain. This last operator — who acquires the fuels to resell them — does not enjoy the right to deduct the tax borne on acquisitions and must apply the same regime to the transfers they carry out.

Invoicing without settlement and tracking via electronic declaration

Invoices for the covered transfers are now issued without tax settlement and must contain two additional elements: the mention “VAT due by the acquirer — article 75.º-A of the CIVA” and the number and date of the electronic release for consumption declaration (e-DIC) issued under the Excise Duty Code.

The Tax and Customs Authority (AT) may request supporting documents for the transactions, specifically the correspondence between the e-DIC and the invoices issued in the marketing chain. The new regime applies without prejudice to the obligations and procedures provided for in the Excise Duty Code.

Certification, 3 million guarantee, and five-year ban

The law subjects participants in the SPN to certification by the Directorate-General for Energy and Geology (DGEG), with monitoring and supervision by the National Entity for the Energy Sector, E. P. E. (ENSE, E. P. E.), and imposes specific certification for the distribution of petroleum products via pipeline.

• Mandatory and free registration on the electronic platform, with a centralized registry of participants, facilities, vehicles, and tanks.
• An autonomous bank guarantee of €3,000,000 as a condition for the certification of marketers of crude oil and petroleum products.
• Revocation of certification due to false statements, non-compliance with conditions, or serious breach of duties, including tax obligations.
• Ban from exercising the activity for five years for the holding entity, its directors or managers, and subsidiaries or entities under its control.
• Prohibition from exercising a profession or activity, as an accessory sanction, for a maximum duration of five years.
• Communication of decisions by the DGEG to ENSE, E. P. E., the Energy Services Regulatory Authority (ERSE), and the AT.

Fines up to 1 million euros and calendar of obligations

Article 40.º-B of Decree-Law no. 31/2006 punishes non-compliance with certification, accounting separation, and legal and asset separation obligations, as well as registration and information provision obligations of carriers, distributors, wholesalers, and retailers, with a fine of €1,000 to €50,000 for individuals and €5,000 to €1,000,000 for legal entities. The liability of companies does not exclude the individual liability of their agents.

• Entry into force on the day following publication.
• Articles 5 and 6 (amendments to Decree-Law no. 31/2006) in force 60 days after publication.
• DGEG regulation on the guarantee approved within 60 days.
• Provision of the €3,000,000 guarantee by already certified marketers within 90 days.
• Taxpayers under the quarterly regime shall submit the declaration during January 2027 and switch to monthly periodicity starting January 1, 2027.

For resellers and wholesalers, the diploma changes the method of tax settlement at each link in the chain and adds documentary and certification duties, the non-compliance of which is sanctioned up to 1 million euros; for the final consumer, the expected effect is a more traceable supply chain with less room for VAT tax fraud on fuels.

Source: Diário da República, 1st series, no. 215, of November 5, 2026, section I (Assembly of the Republic) (official reference: Law no. 65/2026).