Invoicing French Clients from Portugal: Is It Legal and How to Stay Compliant

Intra-EU B2B: reverse charge, the simplest case

When your Portuguese company invoices a French business (B2B), you have two taxable persons identified for VAT in two different EU member states. In that situation the supply generally falls under the reverse-charge mechanism: you invoice without tax, applying no Portuguese IVA, and it is your French client who self-assesses French VAT in their own return. You therefore do not collect tax on Portugal's behalf on these operations, and your client does not pay double VAT.

In practice, two technical conditions frame this mechanism. First, each party must hold a valid intra-EU VAT number, verifiable in the European Commission's VIES database; it is prudent to validate your client's number before issuing the invoice, and to keep proof of it. Second, the invoice must carry the appropriate statements, in particular both intra-EU VAT numbers and a reference to the reverse-charge regime. The precise wording of these statements is something to set up in your invoicing together with your accountant.

B2C: different rules, and an OSS portal

Selling or providing services to French private individuals (B2C) does not follow the same logic as B2B. Here, the client cannot reverse-charge, since a private individual is not a taxable person. Depending on the nature of the sale or service and the place of consumption, the tax may be due in the client's country. To avoid having to register for VAT in every EU country where you have private customers, a single European portal, the OSS (One-Stop Shop), lets you declare and remit in one place the IVA or VAT due on certain cross-border sales and services to EU individuals.

Detail matters here more than anywhere else: thresholds, the categories of services concerned and the reporting arrangements depend on your specific activity. We do not throw out off-the-cuff figures on this point; it is exactly the kind of call to settle with an accountant or a tax adviser, case by case, depending on what you sell and to whom.

The real risk: permanent establishment

Everything above assumes one thing: that your company is genuinely Portuguese, not just on paper. This is where the heart of the matter lies. Tax law reasons in terms of substance, not registered address. If your activity is in fact carried out and managed from France, because you live there, work there, take the decisions there and sign the contracts there, the authorities may consider that there is a permanent establishment in France, or that the place of effective management is located there. In that case the corresponding profits can be attached and taxed in France, regardless of the address on your invoices.

In other words, invoicing from Portugal protects you from nothing if the economic reality stays French. The tax treaty between France and Portugal, signed on 14 January 1971, entered into force on 18 November 1972 and amended by a protocol of 25 August 2016, organises precisely how the right to tax is shared between the two countries, along with the notions of residence and permanent establishment. It does not create a right to freely choose where you are taxed: it records where the activity actually takes place.

The conclusion is easy to state: no letterbox company. A Portuguese structure with no office, no presence, no decisions taken on site, whose director keeps running everything from Lyon or Paris, has no substance and exposes itself to reassessment, with back taxes and penalties attached.

Building real substance in Portugal

The good news is that substance is not an abstract formality: it can be built. A credible setup requires a real presence and management in Portugal, decisions taken on site, and consistency between your personal situation, your tax residence and where your activity is carried out. It is this overall consistency, more than any single box ticked, that keeps the project standing over time.

This logic holds whatever form you choose, whether an Unipessoal Lda, a multi-partner Lda, an ENI status or an SA, each identified by its NIF or NIPC. The legal form does not create substance; it merely clothes it.

Where we step in, and where our role ends

Our work at Business Portugal is support with company formation and setup: we structure your project, coordinate the steps and connect you with the right people. Since 2025, this is how we have supported more than 75 French-speaking entrepreneurs. By contrast, the fine-tuning of your invoicing, the handling of IVA, the legal statements on your invoices and the analysis of your exposure to permanent establishment fall under regulated accounting and tax matters: these aspects are handled by a Contabilista Certificado and, for sharper tax questions, by a partner tax adviser or accountant.

If you are still hesitating between invoicing from France or from Portugal, or if you want to check that your project rests on solid substance before you start, the most useful thing is to talk it through from your concrete situation: your activity, your clients, and where you actually live and work.