Order n. 1859/2025 (Order) published on February 10 by the Portuguese energy ministerial authority (DGEG), established the procedures for licensing of electricity storage facilities with previously allocated injection capacity in the Public Service Electricity Grid (RESP), for:
- Change of technology in a solar power generation center with an injection capacity reservation title (TRC) that has not yet been built; and
- Standalone/Autonomous storage or co-located storage with previously allocated injection capacity reservation in RESP for a renewable energy power plant.
- Technology Change
A TRC issued under the general access modality for a solar generation center can be changed to an autonomous storage installation, provided that, at the time of the request, the power station construction has not yet started.
The request for modification must be submitted by the TRC holder to DGEG along with the following documents: (i) Identification of the existing TRC; (ii) Summary of the intended operating conditions; (iii) Maximum injection capacity into RESP; and (iv) Maximum apparent power for charging from RESP.
DGEG will review the request and forward it to the relevant grid operator, who has 30 days to provide an opinion on the maximum charging power and any operational restrictions for the storage facility. After the grid operator's response, the request is sent to the system’s global manager (REN), which has 15 days to issue an opinion on the same matters.
If favorable, the grid operator must issue the modified TRC within a maximum of 10 days after DGEG's authorization.
- Use of Allocated Capacity
The injection capacity in a TRC granted to renewable energy power plants can now be simultaneously used to request a production license for autonomous or co-located storage installations, provided they are connected as follows:
- For the National Transmission Grid: at the same grid connection point;
- For the National Distribution Grid: on the same circuit.
The production license request must be submitted by the TRC holder to DGEG (with the explicit authorization of the storage installation holder) along with the required documents listed in Annex I of Decree-Law 15/2022, as well as:
- A summary of the intended operating conditions for the storage installation, including maximum injection and charging power through RESP; and
- A written agreement between the storage installation holder and the power plant holder to coordinate operations and inject the produced energy into RESP.
DGEG will review the request for compliance and forward it to the grid operator and the system's global manager for their opinions on the maximum charging power and potential operational restrictions for the storage facility.
If the opinions are favorable, DGEG will issue the production license within a maximum of 30 days.
The storage installation holder must ensure that the coordinated power plant is not simultaneously coordinated with other autonomous storage facilities. However, the storage installation may benefit from the injection capacity of multiple power plants.
This order came into effect on February 11, 2025.
DGEG, the Portuguese energy ministerial authority, has finally started publishing data on electricity injection capacities in the National Transmission Network (“NTN”) and the National Distribution Network (“NDT”). As of February 5, this information will be updated quarterly. The first dataset, reflecting figures as of December 31, 2024 is available here.
Although there is capacity that remains unallocated, new license applications for renewables’ production to be sold through the grid are currently suspended under Order 27/2020, as amended by Orders 33/2020, 40/2020 and 58/2020.
At present, registration applications are only being accepted for small production units (known as “UPP”) that are either experimental or conceptual demonstration projects. These units must be installed in maritime areas, inland waters, or used for green hydrogen production, as specified in Order 58/2020.
The quarterly publication of these data complies with Decree-Law 15/2022, (“SEN Law”) which regulates the organization and operation of the National Electricity System, transposing Directive (EU) 2019/944 and Directive (EU) 2018/2018, an thus aligning Portugal’s energy policies with European standards.
In fact, DGEG was already required to publish available electricity injection capacities in the national grid – covering the NTN and NDT – on its website: this obligation should have been implemented six months after the SEN Law’s enactment on January 15, 2022, with data referencing December 31st of the previous year.
On February 7th, Resolution of the Council of Ministers No. 19/2025 approved the Offshore Renewable Energy Zoning Plan (“PAER”).
This plan identifies the areas suitable for the installation of offshore wind farms in the national maritime space and includes an assessment of the potential impact of these infrastructures on the marine environment, aiming to ensure they can coexist in a balanced way, protecting biodiversity, commercial fishing, and maritime transport.
The PAER allows for an installed capacity of approximately 9,4 GW for commercial projects. marks the first step toward the offshore wind energy auction, which, according to the National Energy and Climate Plan, aims to install 2 GW by 2030; and includes some differences from the proposal submitted for public consultation, which can be reviewed in detail here.
These differences reflect the concerns of the fishing sector, which raised the main objections to the initially proposed area, particularly regarding the protection of navigation corridors and access to ports.
As a result, the maritime area covered by the PAER has been reduced to 2,711.6 km², which represents a decrease of 470 km² compared to the proposal submitted for public discussion, as follows:
- The northern area of Viana do Castelo has been reduced to 229 km2 for a capacity of 0,8 GW (previously with a capacity of 1,9 GW);
- The southern areas of Viana do Castelo and the Ericeira zone have been cancelled; and
- The Leixões area has been set in 722 km2 with a capacity of 2,5 GW (previously with a capacity of 2 GW).
The total area now approved includes a new 5.6 km² zone in Aguçadoura (Póvoa do Varzim), intended for the installation of research and/or non-commercial demonstration projects.
The access to the areas defined in the PAER for commercial projects will be carried out through a government-initiated procedure, as outlined in Article 64 of Decree-Law No. 38/2015: this will be procedure to establish the areas assigned to the tenders for the installation of wind energy projects.
This Resolution came into effect on February 8.
The Tax Simplification Agenda (Agenda) approved by the Portuguese Government introduces 30 measures that will simplify taxpayers’ reporting and payment obligations.
In this newsletter we review the main measures.
PERSONAL INCOME TAX
Regarding Personal Income Tax (PIT), we highlight the following changes:
- Deadlines for ancillary and reporting obligations (e.g. disclosure of the taxpayer's household members and invoices) are now aligned to the end of February; and
- Form 13 (covers income from securities, autonomous warrants, derivative financial instruments), Form 39 (focuses on income and withholding tax reporting) and annex G to Form 3 (addresses capital gains and other asset increases) will be simplified.
CORPORATE INCOME TAX
Concerning Corporate Income Tax (CIT), the Agenda includes the following measures:
- Annex Q will no longer be included in the Annual Simplified Company Information (IES), meaning, the annual Stamp Duty statement will be discontinued, with the monthly statement now deemed sufficient;
- Tax losses from previous years will automatically be filled in the annual tax returns (Form 22);
- The responsibility for identification of shareholders will no longer fall on taxpayers. Instead, this process will be conducted automatically and at no cost by the Portuguese Institute of Registries and Notaries;
- The invoicing rules will be simplified, particularly regarding the requirements for issuing electronic invoices.
VALUE ADDED TAX
Pertaining to Value Added Tax (VAT), the following changes stand out:
- For VAT refunds exceeding €30,000, taxpayers will have the option to request an immediate reimbursement; for this purpose, they must provide a bond, which will be released following the inspection or the validation of the submitted statement by the Tax Authorities;
- The Tax Authorities will automatically process the VAT returns for individuals with no taxable transactions, therefore preventing tax assessments and administrative fines for the non-submission of such returns;
- The requirements for waiving the VAT exemption on real estate transactions will be simplified, and the prior issuance of a certificate for this purpose will no longer be necessary;
- The request to pay VAT in instalments may be submitted prior to the deadline for filing the VAT returns;
- VAT taxpayers who do not maintain organized accounting will no longer be required to keep physical record books. Instead, it will be sufficient to classify invoices directly in the Tax Authorities’ website;
- The obligation for exporters to submit an electronic customs export statement in order to obtain the document certifying the departure of goods with VAT exemption and an amount under €1,000, will be eliminated.
VEHICLES CIRCULATION TAX
Finally, in reference to the Vehicles Circulation Tax (IUC), the Agenda contemplates the following measures:
- The IUC payment will become due annually for all vehicles, on a single date;
- For IUC amounts exceeding €100, payment can be made in two instalments.
These changes will now require implementation through legislative acts and administrative measures issued by the Tax Authorities.
The document approved by the Government is available here.
The Portuguese Government approved the Offshore Renewable Energy Zoning Plan (PAER) on January 9th, with the aim of identifying suitable areas for the development of offshore wind farms within the national maritime space. The plan also includes an assessment of the potential environmental impacts of these infrastructures, to ensure they reconcile activities, particularly commercial fishing and environmental conservation.
This plan is part of the National Energy and Climate Plan 2030 (PNEC 2030), which sets targets to decarbonize the economy and promote renewable energy, targeting a 47% share of renewable energy in gross final energy consumption by 2030. Initially, the Government set a target of 10 GW of offshore wind capacity by 2030. However, after reviewing the PNEC 2030, this target was adjusted to 2 GW only, by the end of the decade.
The PAER version submitted for public consultation in 2023 identified six potential areas for the installation and development of offshore wind farms: Viana do Castelo North and South, Leixões, Figueira da Foz, Ericeira, and Sines.
The offshore wind auction, initially scheduled for 2023, was postponed due to the technical complexity and the absence of necessary approvals for seabed use for offshore wind farms. Following the recent approval of the PAER, the first auction is anticipated to be launched in 2025, for 2 GW of capacity by 2030. The EU plans to expand offshore wind energy from 3% to 25% of its electricity consumption by 2050. Portugal is starting to align with this goal, with just 25 MW of capacity currently installed off the coast of Viana do Castelo.
The approval of the PAER enables the development of offshore wind energy in Portugal, as it will update and be automatically incorporated in the National Maritime Spatial Planning Plan (PSOEM), which designates the areas for the different maritime activities. According to the latest comments from the Portuguese Minister of Environment and Energy, the offshore wind energy auction will take place in two phases:
- First phase: Seabed rights will be granted for a defined duration enabling developers to conduct studies and assess the area, subject to the provision of a guarantee payment.
- Second phase: An auction will be held for Contracts for Difference (“CfD”), where a reference price will be set for the purchase of the energy produced. Under this model, when the market price falls below the reference price, the government compensates the energy producer for the difference. Conversely, when the market price exceeds the reference price, the producer must reimburse the difference.
The choice of a two-phase auction is justified by the limited maturity of floating offshore wind technology, which is not yet fully developed. The additional time allocated to study the areas will help accurately predict the project’s financial return, which is crucial for securing financing. A one-phase auction, on the other hand, would speed up the process but involve higher risks, such as inflating prices or having no participants in the auction if the CFD does not offset the risks.
According to estimates from APREN, the Portuguese Renewable Energy Association, the installation of 2 GW of wind capacity by 2030 represents an estimated investment of approximately 9 billion euros. It is also expected to contribute up to 1.7 billion euros to GDP and create between 5,000 and 13,561 new jobs.
For information on the licensing process for maritime space, you can consult our Offshore Wind Power Production Licensing in Portugal.
On December 23, 2024, ANACOM, the Portuguese telecoms National Regulatory Authority (NRA), approved a Regulation on Number Portability. This regulation outlines the principles, rules, and processes that telecom operators must follow to ensure number portability in electronic communications networks.
This new regulation aligns with the updated Electronic Communications Law and the EU Directive 2018/1972. The directive mandates that prices for number portability services must be cost-based and prohibits direct charges to end users. It aims to strengthen consumer rights, making it easier to switch service providers and ensuring equal protection for consumers across the EU.
As Portugal was required to implement this directive, the regulation establishes a ban on charging direct portability fees to end-users with contracts linked to numbers. Other relevant features of this regulation are:
- The setting of compensation of €10 to customers for failure to comply with the scheduling of physical intervention network, which requires the rescheduling of the intervention for another day.
- The obligation of the Receiving Provider to ensure that portability and the subsequent activation of numbers take place on the date expressly agreed with the customer as soon as possible and no later than one working day after that date.
- In the event of termination of the contract, and unless they waive this right at the time of deactivation of the service, the end user retains the right to port PNN numbers to another company.
- The quarantine period for numbers is 90 days, during which users can still transfer their numbers to another company, unless they gave up this right when canceling the service. Additionally, companies cannot give these numbers to others for 180 days.
- The limitation on the wholesale cost that operators can pass on to competitors for the service. It now has a maximum value of €1.
- When a prepaid service number is ported, the original provider must refund the remaining credit to the user. However, the user may have to pay a fee for this refund if it's stated in the contract and is reasonable based on the company’s costs.
The new regulation will become effective on 23 November 2025.
The Bank of Portugal ("BoP") has approved Notice no. 6/2024 ("Notice"), which outlines the disclosure requirements that credit institutions must follow for State-backed home loans offered to young individuals aged 35 or under.
The State-backed home loans framework was approved by Decree-Law n.º 44/2024, which defines the conditions under which the Portuguese State may provide personal guarantees to credit institutions to support financing for young individuals purchasing primary and permanent housing priced at up to €450,000.
This framework was further regulated by Ordinance No. 236-A/2024/1, which approved the form of a protocol to be signed between the Directorate-General of Treasury and Finance ("DGTF") and the credit institutions that express interest in participating.
Under this framework, the State guarantee, issued by the DGTF, is valid for up to 10 years from the contract’s signing date and is limited to a maximum of 15% of the loan amount.
The newly approved Notice differentiates between:
- Information intended for the general public; and
- Information intended for the loan applicants throughout the duration of the credit agreement.
With regards to information for the general public, credit institutions must:
- Identify the covered credit agreements;
- Outline the eligibility criteria;
- Clearly indicate that meeting the criteria does not override the institution's discretion in granting credit; and
- Provide details on the key features of the State guarantee.
This information should be accessible on credit institution's websites, online banking platforms, and mobile applications of credit institutions, as well as provided in durable format to clients who request it at branches or through remote communication channels. Credit institutions are encouraged to use the template provided in the annex to the Notice for this purpose.
During the term of the credit agreement, clients must be informed about the enforcement of the State guarantee by the credit institution, their liability for repayment to the State and the expiration of the guarantee.
The Notice came into effect on January 1st, 2025. and applies to all credit institutions that enter into a protocol with the DGTF.
ERSE has launched a public consultation on the proposed Development and Investment Plan for the National Electricity Transmission Network covering the period of 2025 to 2034 (PDIRT-E 2024), developed by the National Electricity Grid (REN) in its role as an operator of the National Electricity Transmission Network (TSO).
The proposed PDIRT-E plan outlines a 10-year roadmap designed to meet the climate and energy goals/targets established in Portugal’s National Energy and Climate Plan 2030 (PNEC 2030), the Long-Term Carbon Neutrality Strategy 2050 (RNC 2050) , and the National Electricity System Security of Supply Monitoring Report (RMSA-E 2023). Key highlights of the plan include:
- An increase in installed capacity by by approximately 30 GW by 2034 bringing the total to nearly 45 GW, supported by renewable energy projects:
– 23 GW of additional solar photovoltaic capacity (compared to 6.5 GW installed by 2024).
– 6 GW of additional wind capacity (compared to 6.3 GW installed by 2024).
– 1 to 2 GW in offshore wind capacity.
- the Tapada do Outeiro natural gas combined cycle power station is scheduled to cease operations in 2029 as part of the decommissioning process.
- As for the investment proposed for the Base Projects, initiated exclusively by the TSO, focus on ensuring the safety, operability and reliability of the National Electricity Transmission Network (RNT). Notable initiatives include:
– Renovation of protection, automation and control systems at the substations of Alqueva, Bodiosa, Lavos, Trafaria, Paraimo and Batalha between 2025 and 2029.
– The creation of a new 220 kV connection between the Rio Maior and Carvoeira substations in 2029.
- Complementary Projects, involve the expansion or reconfiguration of the national transportation grid ,driven by external factors and subject to the grantor’s assessment. The final investment decision is contingent upon the Portuguese Government assessment of its relevance and timing, and this proposal includes, among other aspects:
– Reconfiguration of the Porto network by establishing new 220 kV underground circuit connections along the Vermoim-Custódias-Prelada corridor, including converting sections of existing 220 kV overhead lines to underground circuits.
– Reconfiguration of the Lisbon network, by reinforcing it with new 220 kV underground connections between the western area of Loures and the Carriche substation, alongside the conversion of specific overhead lines to underground circuits.
– Supporting the Power supply for the Porto – Lisbon high-speed rail line, with four connection points to the National Transmission Network , including three new substations in the Oliveira de Azeméis/Estarreja, Cantanhede, and Leiria, as well as the existing Rio Maior substation.
This ambitious plan underscores the commitment to modernizing Portugal’s electricity infrastructure and supporting the transition to renewable energy.
An investment of €1.6915 billion is planned until 2034, reflecting a substantial increase compared to the €831.2 million estimated in the PDIRT-E 2021.
The public consultation will close on 17th of February, 2025.
A public consultation has also been launched for the revision of the Manual of Procedures for Global System Management (MPGSM ) to incorporate markets for Frequency Restoration with Automatic Activation (aFRR) and new tools for system services , aligned with the amendments to the Electricity Sector Network Operating Regulation (ROR), July 2023.
The MPGGS establishes sthe operating rules for Global System Management (GSM) conducted by the transmission system operator (TSO), ensuring the security and operation efficiency of the National Electricity System (SEN) and the effective functioning of the ancillary service markets. The following measures stand out:
- The implementation of Automatic Frequency Restoration Reserves (aFRR) and the associated capacity market, along with the integration of the SEN into the European Picasso platform.
- Promoting non-discriminatory access to markets for aggregators by establishing clear contracting modalities for the representation of producers, autonomous storage solutions, and for the representation of renewable generation, consumption, or self-consumption.
- Introducing a mechanism to manage injection into the network by non-enabled physical units, ensuring the active participation of all physical units in frequency balancing.
- Establishing a standardized capacity product for the following day, linked to the Manual Frequency Restoration Reserves (mFRR) product, with contracts settled for each 15- minute period..
The public consultation will close on February 13, 2025.
The Bank of Portugal ("BoP") has approved Notice no. 7/2024 ("Notice"), which establishes the countercyclical capital buffer percentage that credit institutions with head offices in Portugal must apply starting from 1 January 2026.
This buffer was introduced in the General Framework for Credit Institutions and Financial Companies in 2014 to comply with European requirements.
The buffer consists of Common Equity Tier 1 capital, assessed on both an individual and consolidated basis (as applicable), and is calculated by multiplying the total amount of risk exposures by the prevailing percentage. In practice, this buffer requires credit institutions to retain a portion of their profits and/or increase their capital.
The countercyclical buffer percentage is determined by the BoP within a range of 0% to 2,5%, in multiples of 0,25%, and is reviewed on a quarterly basis.
In determining the percentage and conducting its quarterly review, the BoP must consider, particularly:
- The intensity of cyclical systemic risk;
- The buffer guidance set by the BoP;
- The relevant guidelines issued by the European Systemic Risk Board; and
- Any additional factors deemed relevant by the BoP to address cyclical systemic risk.
The Notice sets a countercyclical buffer of 0,75% of the total risk exposures in Portugal, effective from 1st January 2026. Credit institutions may exclude certain exposures (e.g., regional and local governments, public sector entities) from the buffer calculation, provided specific conditions are fulfilled.
This buffer had already been implemented in other European Union countries, including Germany (0,75%), France (1%), Belgium (1%), the Netherlands (2%), Sweden (2%), Denmark (2,5%), and Norway (2,5%). However, some countries temporarily suspended it during the pandemic. Meanwhile, nations like Spain, Italy, Austria, Poland, and Finland, currently apply a 0% buffer, though several have announced plans to introduce it.
The BoP justified its decision to activate the countercyclical buffer at this stage citing a "neutral” period where systemic risk is not in an accumulation phase.
However, given certain risks related to asset overvaluation and the implementation of other buffers may overlap, questions regarding the appropriateness and proportionality of the measure may arise.
The State Budget for 2025 was approved by Law 45-A/2024 of December 31 (“2025 State Budget”) with small changes compared to the proposal presented by the Portuguese Government. In this newsletter we summarise the additional tax changes approved by the Portuguese Parliament.
PERSONAL INCOME TAX
Income eligible for the Youth PIT program will be exempt from withholding tax, corresponding to the portion of income exempt from taxation.
VAT
The following changes stand out:
- Clarification has been issued that the restrictions on VAT deductions do not apply to bicycles, whether motorized or non-motorized;
- Reduction of VAT rate applicable to bullfighting shows (item 2.32 of list I annexed to the VAT Code); and
- The reduced VAT rate will apply to food products designed for infants and young children, including transitional formulas, as well as medical-purpose foods and complete dietary substitutes for weight management (item 1.14 of list I annexed to the VAT Code).
REAL ESTATE TRANSFER TAX AND STAMP DUTY
The 2025 State Budget includes the following additional changes:
- An exemption is granted for registration fees and other associated costs for all acts and contracts required to facilitate land consolidation involving contiguous or adjoining rustic properties owned by the same individual, regardless of their economic use. This exemption also applies to the registration of rights and encumbrances associated with the consolidated rustic properties; and
- Exemption from RETT and Stamp Duty on transfers of rustic property required for the implementation of the above-mentioned land consolidation transactions.
TAX BENEFITS
Entities that are licensed to operate in the Madeira Free Trade Zone in the years 2025 and 2026 will benefit from the reduced Corporate Income Tax rate of 5% until 31 December 2028.
A summary of all tax measures approved by the 2025 State Budget can be found here .