VAT on e-books in Portugal: does the reduced 6% rate apply to telecommunications bundles?

The issue of the VAT treatment applicable to e-books in Portugal has become increasingly relevant in the digital sector, particularly regarding the application of the reduced 6% rate when digital books are included in telecommunications service bundles. The Portuguese Tax and Customs Authority (“AT”), through Binding Ruling no. 28778 of 31 October 2025, clarified the VAT treatment applicable to the supply of books in digital format (“e-books”), confirming that the supply of e-books constitutes an autonomous supply of services for VAT purposes and benefits from the reduced rate provided for in item 2.1 of List I annexed to the Portuguese VAT Code (CIVA).

This decision is particularly relevant for digital platform operators, publishers, telecommunications operators and other entities integrating digital content into combined business models.

1. Legal framework: e-books qualify as supplies of services

Under Article 3(1) of the Portuguese VAT Code (“CIVA”), only transactions involving tangible goods qualify as supplies of goods. In turn, Article 4(1) of the CIVA classifies as supplies of services all transactions carried out for consideration that do not qualify as supplies of goods.

The AT reaffirms that e-books, as they do not have a tangible nature, cannot qualify as supplies of goods and necessarily constitute supplies of services for VAT purposes. This point is essential, as it definitively excludes any conceptual equivalence between physical books and digital books in terms of the classification of the transaction — although, as we shall see, it does not prevent the application of the same reduced rate.

2. Autonomy vis-à-vis télécommunications services

One of the central aspects of the binding ruling was to determine whether the supply of e-books, when included in a telecommunications bundle, should be regarded as:

• a single and indivisible supply, subject to the regime of the main service (telecommunications); or
• an autonomous supply, with its own VAT treatment.

The AT concludes that:

• The supply of e-books constitutes a distinct and independent supply of services;
• There is no indivisible link requiring treatment as a single supply;
• The telecommunications service may be contracted without the e-book service;
• For the average consumer, the e-book represents an end in itself

This conclusion is aligned with the settled case law of the Court of Justice of the European Union regarding composite supplies and the criteria of ancillary services.

3. What VAT rate applies to digital books in Portugal?

The central issue concerned the application of item 2.1 of List I annexed to the CIVA.

Under that item, the reduced rate (Article 18(1)(a) of the CIVA) applies to:

“Books (…) in all physical formats or by electronic means (…)”, subject to the legally established exclusions

The AT expressly confirms that:

• Item 2.1 covers books in electronic format;
• The supply of e-books through a digital platform benefits from the reduced 6% rate;
• The applicable rate does not depend on how the price is adjusted between the parties;
• The fact that e-books are included in bundles does not alter their objective VAT treatment

Accordingly, in the invoicing issued by the entity supplying the e-books to telecommunications operators, the reduced 6% VAT rate must be applied.

4. Limitation of the binding effect

The AT clarifies, however, that the binding effect of the ruling is limited to the transactions carried out by the applicant.

The invoicing model used by telecommunications operators towards final customers was not subject to binding analysis, due to the applicant’s lack of standing to request a ruling on third-party transactions.

This point is relevant from a legal certainty perspective: although the substantive position regarding the autonomy of the supply is established, each operator must analyse its own contractual and invoicing arrangements.

5. Practical impact on the VAT treatment of digital services in Portugal

This binding ruling is particularly relevant in the context of the VAT treatment applicable to digital services in Portugal, namely in combined (“bundle”) business models:

1. Contractual structuring

It allows contracts between digital platforms and telecommunications operators to be structured with greater tax predictability.

2. Separate invoicing

It reinforces the importance of properly distinguishing supplies on invoices, whenever applicable.

3. Combined business models

It provides stability to the VAT treatment of bundle models including digital content subject to the reduced rate.

In a context of increasing digitalisation and service integration, the clarification provided by the AT helps mitigate the risk of tax requalification and future contingencies.

Conclusion

Binding Ruling no. 28778 confirms that:

• The supply of e-books constitutes an autonomous supply of services;
• Item 2.1 of List I of the CIVA covers books in electronic format;
• The reduced 6% VAT rate applies even when e-books are supplied within telecommunications bundles, provided that the material autonomy of the supply is maintained.

This constitutes a relevant clarification for the digital sector and telecommunications operators, reinforcing the coherence of the VAT system in the transition from physical to digital formats.

The Tax Department of Belzuz Abogados, S.L.P. has extensive experience in analysing and structuring VAT transactions, including digital business models, electronic services, online platforms and cross-border operations. Our team provides specialised advice in obtaining binding rulings, mitigating tax risks and implementing contract structures that are both tax-efficient and legally robust.

For further clarification or analysis of specific cases, our team remains entirely at your disposal.