{"id":46573,"date":"2026-10-06T15:23:37","date_gmt":"2026-10-06T14:23:37","guid":{"rendered":"https:\/\/crs-advogados.com\/circular-no-25120-dated-28-july-2026-correction-of-invoices-and-vat-adjustments\/"},"modified":"2026-10-06T16:49:52","modified_gmt":"2026-10-06T15:49:52","slug":"circular-no-25120-dated-28-july-2026-correction-of-invoices-and-vat-adjustments","status":"publish","type":"post","link":"https:\/\/crs-advogados.com\/en\/circular-no-25120-dated-28-july-2026-correction-of-invoices-and-vat-adjustments\/","title":{"rendered":"Circular No. 25120, dated 28 July 2026 \u2013 Correction of invoices and VAT adjustments"},"content":{"rendered":"\t\t
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Circular No. 25120, dated 28 July 2026, issued by the Tax and Customs Authority (AT), standardises the procedures applicable to the correction of invoices and the adjustment of VAT, replacing the previous guidance set out in Circular No. 33129\/1993.<\/p>\n

We highlight the following distinctions:<\/p>\n

    \n
  1. Formal errors and cancellation of invoices<\/strong><\/li>\n<\/ol>\n

    A credit note should only be used to correct details that alter the taxable amount or the VAT and should not, as a general rule, be used to cancel an invoice in its entirety.<\/p>\n

    Errors such as the tax identification number (NIF), the address, the identification of the parties or the description of the goods or services, where these do not alter the taxable amount or the VAT, must be corrected by:<\/p>\n

      \n
    1. cancelling the incorrect invoice in the invoicing system;<\/li>\n
    2. issuing a new invoice with the correct details;<\/li>\n
    3. retaining the relevant date of the transaction, to ensure the tax remains chargeable.<\/li>\n<\/ol>\n

      In such cases, there is no VAT adjustment and, in principle, no need to replace the periodic return already submitted.<\/p>\n

      If the transaction never took place, the invoice must also be cancelled. If the periodic return has already been submitted, a replacement return must be filed to remove the VAT that was wrongly declared.<\/p>\n

        \n
      1. Evidence required for adjustments in favour of the taxable person<\/strong><\/li>\n<\/ol>\n

        To reclaim VAT previously overpaid, the supplier must have evidence that the purchaser:<\/p>\n

          \n
        1. has acknowledged the credit note; or<\/li>\n
        2. has been reimbursed for the tax.<\/li>\n<\/ol>\n

          The evidence may be in physical or digital form, including an electronic signature, confirmation of receipt by email or validation on invoicing platforms, and must enable the specific identification of the document, the recipient and the actual acknowledgement of the correction.<\/p>\n

          Presumed acceptance due to a lack of objection is not sufficient. The absence of material and individualised evidence renders the adjustment invalid.<\/p>\n

          For end consumers, the actual refund \u2013 including a credit to a card, a bank transfer or a deduction from subsequent transactions \u2013 may serve as adequate proof, provided it is unequivocally linked to the credit note.<\/p>\n

            \n
          1. Cancelled transactions, returns, discounts and price reductions<\/strong><\/li>\n<\/ol>\n

            Where a transaction is subsequently cancelled or reduced due to invalidity, termination, rescission, return of goods, rebates or discounts, the supplier or service provider may issue a credit note and adjust the VAT by the end of the tax period following that in which the events occurred.<\/p>\n

            The adjustment must be reflected in the periodic return for the period in which the event occurred or in the following period, and is always subject to proof of the purchaser\u2019s knowledge of the event or the corresponding refund.<\/p>\n

              \n
            1. Clerical or calculation errors<\/strong><\/li>\n<\/ol>\n

              The Circular distinguishes between tax overcharged <\/strong>and tax undercharged<\/strong>:<\/p>\n

               <\/p>\n

               <\/p>\n

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              1. Errors of law<\/strong><\/li>\n<\/ol>\n

                Errors of law include, in particular:<\/p>\n

                  \n
                1. incorrect application or omission of the reverse charge mechanism;<\/li>\n
                2. incorrect application of an exemption;<\/li>\n
                3. application of an incorrect VAT rate.<\/li>\n<\/ol>\n

                  Where VAT has been charged unduly or at a rate higher than that due, the supplier must issue a credit note for the tax to be corrected and may adjust the accounts in their favour in the period of issue, provided they have proof of knowledge or reimbursement. The purchaser must correct any undue deduction.<\/p>\n

                  Where VAT has not been charged or a rate lower than that due has been applied, a debit note must be issued and a replacement return submitted in respect of the original period of liability.<\/p>\n

                  Adjustments in favour of the taxable person due to an error of law are subject to the four-year time limit provided for in Article 98(2) of the VAT Code.<\/p>\n

                   <\/p>\n

                    \n
                  1. Exempt taxable persons<\/strong><\/li>\n<\/ol>\n

                    Exempt taxable persons who are required to self-assess VAT must submit the periodic return and pay the tax by the end of the month following the month in which the tax became chargeable.<\/p>\n

                    If the correction results in tax payable to the State, a replacement return for the original period must be submitted. If it results in a credit in favour of the taxable person, the adjustment is made in field 40 of a subsequent periodic return, in accordance with the expiry deadline.<\/p>\n

                    The credit may be carried forward and, under certain conditions, a refund may be claimed:<\/p>\n

                      \n
                    1. as a general rule, where the credit exceeds EUR 250 during the relevant period;<\/li>\n
                    2. in the return itself in which the credit is generated, if it exceeds EUR 3,000.<\/li>\n<\/ol>\n

                       <\/p>\n

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                      1. Special scheme under item 2.42 \u2013 housing and rent<\/strong><\/li>\n<\/ol>\n

                        The Circular sets out the adjustments relating to the reduced rate provided for in item 2.42 of List I annexed to the CIVA, introduced by Decree-Law No. 97\/2026.<\/p>\n

                        If the purchaser initially applied the reduced rate and it was subsequently found that the conditions were not met, they must make a VAT adjustment in favour of the State. In certain cases, a replacement return for the original periods will be required; in others, the adjustment may be made in the return for the period in which the non-compliance occurred or in the following period.<\/p>\n

                        Conversely, if the reduced rate was not initially applied but the conditions are subsequently met, an adjustment in favour of the taxable person may be made, provided that this is verified within the four-year limitation period.<\/p>\n

                        The procedure varies depending on whether the purchaser is subject to the standard VAT regime or is fully exempt. In cases of reverse charge, it is the purchaser who self-assesses the tax and makes the adjustment in their return.<\/p>\n

                          \n
                        1. Transitional regime until the end of 2026<\/strong><\/li>\n<\/ol>\n

                          Until 31 December 2026, it is exceptionally permitted, for the purpose of adapting invoicing systems, to issue a credit note that fully cancels the transaction and then issue a new invoice, where it is only necessary to correct the VAT.<\/p>\n

                          The new invoice must identify the original invoice and retain the relevant date of the transaction. After this period, the use of this procedure will, in principle, require the restoration of the documentary record and the submission of replacement returns by both parties.<\/p>\n

                           <\/p>\n

                          In light of these changes, it is important to analyse the potential tax implications that may arise from them.<\/p>\n

                          CRS Advogados is available to clarify any queries relating to the new procedure for correcting invoices and adjusting VAT.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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