## [Portugal: Reduction from 18% to 16% of the VAT rate in Azores](/en_GB/new/portugal-reduction-18-16-vat-rate-azores) # Portugal: Reduction from 18% to 16% of the VAT rate in Azores Portugal - 06 / 23 / 2021 Portugal Tax Alert - - [](https://www.linkedin.com/sharing/share-offsite/?url=https://www.garrigues.com/en_GB/new/portugal-reduction-18-16-vat-rate-azores) - []() - []() Previous Next **The Parliament of the Autonomous Region of Azores approved a generic reduction of 30% of the national personal income tax (PIT), corporate income tax (CIT) and value added tax (VAT) rates through the [Regional Legislative Decree no. 15-A/2021/A](https://dre.pt/application/file/a/164235735), published at the Official Gazette ('Diário da República') on 31 May of 2021.** Regarding VAT, the Secretary of State for Fiscal Affairs has determined that the standard rate will thus decrease from 18% to 16% as of 1 July onwards, remaining unchanged the 4% and 9% rates. Thus, given that the applicable rate is the one that is in force at the time the VAT becomes chargeable, the aforementioned 16% rate should then be applied to operations located in the Autonomous Region of Azores whose VAT becomes chargeable on the 1st of July 2021 onwards, including intra-community acquisitions. Similar to what currently happens when changes of this nature occur, the Portuguese Tax Authority issued [Circular Letter No. 30237, of 22 June, 2021](https://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/legislacao/instrucoes_administrativas/Documents/Oficio_circulado_30237_2021.pdf), which includes some explanatory notes regarding the extension of this legislative modification. We recall, for example, in this regard that when the legal deadline for issuing the corresponding invoice is not respected and it should have been issued by 30 June but it is only issued after 1 July, the applicable rate will still be the 18%. On the other hand, in what respects to VAT regularizations, when there is a cancellation or reduction of the taxable value of an operation to which the rate of 18% has been applied, the corresponding amending document must reflect the same rate, regardless of the date when that adjustment occurs. 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