The Portuguese tax office has announced that outstanding VAT may be declared with reduced fines until 20 December 2013.
This latest amnesty was granted with the authorisation of the bail-out partners – the European Central Bank, European Commission and International Monetary Fund.
For any previously undeclared Portuguese VAT, there will be no late interest charge, or the normal extra return charges. There will be reduced penalties thought.
Portugal suffers large VAT Gap
Portugal has one of the largest VAT Gaps, the difference between the VAT expected based on annual GDP, and the VAT actually recovered. This is thought to be because of VAT fraud. However, since there are many exemptions and much use of the reduced VAT rates, this may also account for much of the leakage.
The Portuguese VAT audit also applies to some other taxes.