Art. 9 VAT Exemption in Portugal: Health, Teaching, Tutors

Marta has just opened her activity as a physiotherapist. Someone in the group tells her: “lucky you, health services don’t carry IVA.” It’s true - but there’s a second half to that sentence nobody mentions, and it will cost her money the day she buys her first treatment couch.

The IVA exemption in article 9.º of the VAT Code (CIVA) is not the same thing as the small-business exemption (the art. 53.º one, the €15,000 one). It’s an exemption tied to the service you provide (not the whole profession) - and it comes with a trap.

Who article 9.º exempts

Article 9.º exempts a set of public-interest activities from IVA. For freelancers, the three that come up most are these:

Careful with a point that trips many up: the exemption is by service, not by whole profession. It covers the clinical act (health with a therapeutic purpose) and the teaching of curriculum subjects - whereas coaching, wellness or non-curricular tutoring can be taxed at 23%. When in doubt about a specific service, check.

When a service of yours fits here, you don’t charge IVA on that service. Careful with an important detail: this is not “IVA at 0%” - it’s an exempt operation. On the invoice you select “Isento” (not zero-rate), with the note “Isento ao abrigo do artigo 9.º do CIVA” (code M07 in e-fatura). Simple. The problem is what comes next.

The trap: it’s an “incomplete” exemption

There are two kinds of IVA exemption, and the difference is real money.

• Complete exemption (zero-rated): you don’t charge IVA on sales and you keep the right to deduct the IVA on your purchases. Exports (art. 14.º) are one example.
• Incomplete (or simple) exemption: you don’t charge IVA on sales, but you also can’t deduct the IVA you paid on your purchases.

The art. 9.º exemption is the incomplete one. Under art. 20.º n.º 1, you can only deduct IVA on purchases used for taxed operations - and yours are exempt. The result: the IVA you pay on equipment, rent or software becomes a cost of yours, which you don’t get back (unless you also have taxable activity - then you can deduct the attributable part, by real allocation or pro rata, art. 23.º).

A professional who charged IVA to clients would get those €230 back. Marta doesn’t. So anyone under art. 9.º has to build the IVA on their purchases into the price of their services.

Article 9.º or article 53.º? Don’t mix them up

They look like the same thing (“I don’t charge IVA”), but they’re different exemptions, for different reasons.

Watch a common mistake: Rui is a trainer on recibos verdes who assumes “training is exempt”. But the art. 9.º exemption (n.º 10) belongs to a training body recognised as competent (usually DGERT-certified), not the individual trainer - holding the CCP (pedagogical competence certificate) is a personal qualification, not a certification of the activity. So Rui, alone with his CCP, charges 23% IVA — unless he’s covered by the art. 53.º exemption (invoicing up to €15,000/year), in which case he charges none. (School-subject tutoring, on the other hand, is exempt under art. 9.º.) And if you combine an exempt activity with a taxed one, you have to separate the two and apply partial deduction (by real allocation or pro rata, art. 23.º).

Warning: the costliest mistake is thinking “I’m exempt, so the IVA on my purchases comes back to me.” It doesn’t. Under the art. 9.º exemption, the IVA on equipment, rent and software is money you don’t recover - build it into your price. And if you combine an exempt activity with one that charges IVA, don’t add it all up blindly: there’s partial deduction (by real allocation or pro rata), and it’s worth checking the calculation before you submit.

✅ In summary

1. Art. 9.º exempts certain public-interest services - health (with a therapeutic purpose), teaching and tutoring of curriculum subjects. It’s by the service, not the whole profession. Mind vocational training: it’s only exempt when delivered by an entity recognised as competent (usually DGERT-certified) - a solo trainer with a CCP charges 23% (unless exempt under art. 53.º, invoicing up to €15,000/year).

2. But it’s an incomplete exemption: you don’t deduct the IVA on your purchases (art. 20.º n.º 1), so that IVA is a cost of yours. It’s different from the art. 53.º exemption, which is by low income up to €15,000 - and different again from picking the right rate when you do charge IVA (see the 6%, 13% and 23% rates).

3. With FIZ you invoice without IVA using the correct exemption reason and handle the rest of your tax life - receipts, IRS, Social Security - in one place, without memorising code articles. See the plans.