According to the Portuguese VAT Code, the tax deduction concerning bad debts which are outstanding for more than 24 months from due date, must be made upon request.

As a result of the above, Ordinance No. 172/2015, of June 5, 2015, was published, establishing the procedure to submit the authorization request, and approving as well, the form required and the respective filing instructions.

Under the law, the authorization request should be presented trough the Portugal Tax Authority website, not later than 6 months following the date at which 24 months passed after due date, meaning, from the date they are considered bad debt (Article 78º-A, (2), (a) of the VAT Code).

The authorization request shall also comply with the requirements laid down in Article 3 (3) of the referred Ordinance. Among the several requirements we highlight the invoice certification to be provided by the Certified Public Accountant which should confirm the certification regarding the elements of each invoice within 10 days after the submission of the request.

The decision of acceptance or rejection of the request is notified to the taxpayer by electronic means.