We have entered the last four months of the financial year. For many companies, September means a return to normal trading after the summer; for anyone managing stock, it marks the start of the period in which it is still possible to correct what, on 31 December, becomes uncorrectable.
The inventory as at the last day of the financial year is not an administrative formality. It is the basis of three things at once: the margin the company will report, the tax it will pay, and the information it will report to the Portuguese Tax Authority (Autoridade Tributária, "AT"). And for the 2026 financial year, that last component changes in nature.
The inventory report to the Tax Authority, provided for in Article 3.º-A of Decree-Law no. 198/2012, is filed by 31 January of the following year, electronically, through the E-Fatura portal. It applies to taxable persons with their seat, permanent establishment or tax domicile in Portugal, that keep organised accounts and are not taxed under the simplified regime. Companies whose tax period does not coincide with the calendar year file by the end of the month following the end of that period.
None of that is new. What is new is valuation.
The report filed in January 2026, covering the inventory as at 31 December 2025, was exempt from valuation for all taxable persons. For tax periods beginning on or after 1 January 2026, that exemption survives only for those not required to operate a perpetual inventory system. In other words, companies subject to perpetual inventory must now report a valued inventory, using the file structure set out in Ministerial Order (Portaria) no. 126/2019. In practice, the inventory your company counts on 31 December 2026 will be the first to reach the Tax Authority with both quantities and values.
This is not a change of form. A valued inventory filed with the AT is a dataset that can be cross-checked against the SAF-T invoicing file, against declared purchases, and against the cost of goods sold reported in the income statement. Inconsistencies that were previously contained within the accounts become visible from the outside.
Each company's position is worth confirming individually, because the valuation requirement follows the perpetual inventory requirement — and not every entity is subject to it.
Article 12.º of Decree-Law no. 158/2009 requires entities applying the Portuguese accounting standards (SNC) or IFRS to adopt a perpetual inventory system, with physical counts at period end or on a rolling basis, provided each item is counted at least once per financial year.
The exemptions are narrowly drawn and not generous:
In short: the overwhelming majority of industrial and commercial companies of any size are caught — and the exemption is lost as soon as the thresholds are exceeded.
There is a timing point here that deserves attention. Decree-Law no. 126-B/2025, of 5 December, updated the SNC size criteria: micro-entities are now those that do not exceed two of the three limits of EUR 450,000 total assets, EUR 900,000 net turnover and an average of 10 employees during the period — previously EUR 350,000 and EUR 700,000. This change applies to financial statements for periods beginning on or after 1 January 2026, which is precisely the first period for which valuation becomes mandatory. Companies that were sitting just above the old thresholds may therefore fall outside the perpetual inventory requirement — and, consequently, outside the valued reporting requirement. It is worth doing that calculation now, not in January.
In a manufacturing business, inventory is where margin is decided. Production cost absorbs raw materials, direct labour and allocated manufacturing overheads; a poorly calibrated allocation basis, or consumption recorded by estimate rather than by actual usage, produces an incorrect unit cost that contaminates the selling price, the product-level profitability analysis and the result for the year. In a trading business the mechanism is more direct but no less severe: every euro tied up in stock is a euro that is not in the bank, and slow-moving stock almost always ends up moving at below cost.
In both cases the effect is the same. Inventory is simultaneously the largest current asset of many SMEs and the hardest to audit — and it is the only one whose valuation translates, cent for cent, into taxable profit.
1. Impairment losses. Article 28.º of the Corporate Income Tax Code (CIRC) allows the deduction of impairment losses on inventories up to the difference between acquisition or production cost and net realisable value as at the balance sheet date, where the latter is lower. Net realisable value is the estimated selling price in the ordinary course of business, less the costs necessary to complete and sell. Reversals, whether full or partial, are subsequently added back to taxable profit.
The decisive phrase is "as at the balance sheet date". You cannot document in February the write-down that existed in December. Identifying in September and October what is obsolete, damaged or end-of-line, and gathering evidence of the price at which it can actually be sold, is what separates an accepted impairment from an adjustment on inspection.
2. Write-offs and destruction of goods. This is where the calendar is unforgiving. The position applied by the Tax Authority, originating in Circular Letter (Ofício-Circulado) no. 35 264 of 24 October 1986, requires prior notice to the AT 15 days in advance, stating the place, date, time and tax value of the goods to be destroyed, together with a written record signed by two witnesses describing the goods, the year and cost of acquisition, the book value and the tax value. Documentary proof issued by whoever carried out the destruction must also be retained.
A write-off decision taken on 20 December does not meet the 15-day requirement before year end. This is, very concretely, an October and November matter.
3. Reconciling physical stock with the accounts. Counting in December and discovering discrepancies is too late. Rolling counts across these final months allow differences to be investigated while a documentary trail still exists — delivery notes, breakages, returns, internal consumption — instead of being cleared by a single global adjustment, which is exactly the kind of entry the AT questions. It is also worth recalling that Article 86.º of the VAT Code establishes presumptions of acquisition and supply of goods in respect of stock that cannot be located.
September to define the scope and timetable of the counts, to confirm the company's position against the new size thresholds, and to check whether the information system already produces a valued inventory in the required structure. October and November for rolling counts, for identifying obsolete items and for initiating write-off procedures. December for the final count and for documenting impairments. January for filing — not for discovering problems.
ACOQ works closely with its clients throughout this process, and our experience is consistent: companies that treat inventory as a December exercise pay for it twice, first in tax and then in commercial decisions taken on margins that were never real.
On the accounting and tax framework of the perpetual inventory system, we previously published on our blog The perpetual inventory and its alignment with tax legislation, which remains fully current as to the procedures required.
The rules and thresholds set out here are of general application. Each company's specific position — in particular its status under Article 12.º, the costing methods adopted, and the documentation required for each write-off or impairment — calls for individual analysis.
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