PORTUGAL Law and Practice Contributed by: Jorge Silva Martins, João Carminho and Inês Coré, CS’Associados
ment approved the Resolution of the Council of Ministers No 207/2024 on 30 December 2024, which establishes the country’s National Digital Strategy. This strategy seeks to accelerate the digitalisa - tion of public and private sectors while fostering inclusivity, innovation, and sustainability. Its core pillars include: • Public Services Digitalisation: streamlining access to and delivery of public services through advanced digital platforms; • Economic Digital Transformation: support - ing businesses, especially SMEs, in adopting digital tools and transitioning to Industry 4.0; • Cybersecurity and Data Protection: strength - ening digital resilience and compliance with EU data protection regulations; • Digital Inclusion: bridging the digital divide by promoting digital literacy and ensuring equita - ble access to digital tools and infrastructure; and • Green and Digital Transition: encouraging environmentally sustainable digital practices. This strategic roadmap underscores Portugal’s ambition to position itself as a leader in digital innovation in Europe, aligned with EU priorities and objectives. Main Challenges As the digital economy continues to evolve, new challenges emerge, demanding innovative solu - tions and adaptive policies. Portugal, like many countries, faces a range of pressing issues, among which the following stand out: • Artificial Intelligence Regulation: The integra - tion of AI across industries raises concerns about ethical use, accountability and trans - parency. Policymakers must balance fostering
innovation with ensuring AI systems are fair, non-discriminatory, and safe. • Cybersecurity Threats: As digital infrastruc - ture becomes more interconnected, cyber - attacks grow in sophistication and scale. Protecting critical systems, businesses, and consumers requires significant investments in cybersecurity measures and international co-operation. • Cross-Border Data Flows: The growing importance of data for global trade presents challenges in ensuring compliance with dif - fering international data protection laws while maintaining competitiveness in a data-driven economy. • Digital Inclusion: Despite advancements, access to digital tools, services, and skills remains unequal. Addressing digital divides, particularly for older generations, low-income populations, and rural areas, is critical to cre - In Portugal, the taxation of digital services and goods is governed by the European Union’s VAT system, as Portugal is an EU member state. Consequently, national tax laws are regularly updated to reflect EU directives, including VAT reforms and digital taxation rules. However, the dynamic and complex nature of the digital economy presents challenges for businesses, particularly emerging companies offering digital services. Common issues include accurately determining the customer’s location and applying the correct VAT rate, which can be particularly problematic for non-resident entities. Additionally, while the One-Stop-Shop (OSS) system and VAT registration processes are intended to streamline compliance, they often remain administratively demanding. Uncertainty ating an inclusive digital economy. 1.2 Digital Economy Taxation
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