A month's wages cannot be paid as an ato isolado: this is employment
No, that is not allowed, and the problem is not the IVA but what that month actually was. Under Article 3 of the CIRS, the personal income tax code, an ato isolado (a one-off transaction) is income that "does not result from a foreseeable, continuous or repeated practice": one lecture, one commissioned job, one item sold. A month in a restaurant kitchen, working someone else's hours with someone else's ingredients and someone else's cookers, is the exact opposite: the work is foreseeable, continuous and repeated. The fact that your son is not registered as self-employed changes nothing here, and he does not need to register anything: the right form for this kind of work is an employment contract, not an invoice from a contractor. There is also a formal limit: without registered self-employed activity, only one such transaction is allowed per calendar year. The law is ambiguously worded, but both the tax office portal and accountants work on that basis, so he could not do the same again next month. How a one-off transaction differs from genuine self-employment is explained in the guide How to register an atividade and work on recibos verdes.
“An Ato Isolado cannot be issued for regular income, only for one-off and unforeseen income. From what you describe, you need to register as a sole trader. You can avoid IVA under Article 53, but you will lose the discount in your first and second years as a sole trader. From the third year there are no discounts anyway.”
Translated from Russian; the original is at the linkreciboverde09.03.2025
What the law calls this. Article 12 of the Labour Code (Código do Trabalho) sets up a presumption of an employment contract: two of five indicators are enough. The work is done in premises chosen by the employer; the equipment and tools belong to the employer; the employer sets the start and end times of the shift; a fixed amount is paid at regular intervals; the person has a place in the company's structure. The relationship is then treated as employment, whatever the document is called. For a cook in a restaurant, all five apply. In Portugal this has its own name, falsos recibos verdes ("bogus self-employment"), and cooks and waiters are the textbook example that inspections start with.
“These inspections are aimed at fighting bogus self-employment (falsos recibos verdes) — cases where workers who are in fact in an employment relationship are registered as self-employed (waiters and cooks in cafés, workers on building sites, office staff in companies, etc.).”
Translated from Russian; the original is at the linkmyptaxes12.01.2024
What your son loses. With an ato isolado nobody pays any Segurança Social contributions at all: issuing a one-off invoice creates no link with social security. So the month counts towards neither his contribution record for unemployment benefit nor his record for sick pay; the employer does not pay its 23.75% on top, and your son does not pay his 11%. He also loses his pro-rata share of paid holiday, subsídio de férias and subsídio de Natal (the holiday and Christmas payments), the meal allowance for the days worked and, no small thing in a kitchen, the compulsory workplace accident insurance the employer has to take out. Under this arrangement, nobody would pay for a burn or a cut. It is the restaurant that saves money here, not your son. How contributions are calculated and what they give you is explained in the guide How self-employed people pay Segurança Social contributions.
Oddly enough, the employer is not making up the part about IVA. A one-off transaction always carries IVA: the exemption under Article 53 of the CIVA, the one for turnover of up to €15,000 a year, does not cover an ato isolado, and the association of chartered accountants, the Ordem dos Contabilistas Certificados, has said so in so many words. The rate for this kind of service is 23%. How it works: your son issues the invoice (fatura-recibo de ato isolado) himself in his tax office account, IVA is added on top of the amount, and it is also he who pays it to the state, by the end of the month following the one in which the work was done. Since 1 July 2025 there has been no separate modelo P2 form: everything goes through the invoice itself. If the 23% really is added on top, your son loses nothing on it: he receives it and passes it on. But check exactly what is being added: if the same amount is presented as "IVA included", 18.7% of it comes out of his own pocket. And paying on time is his responsibility: late payment means interest and a fine for him, not for the restaurant.
“Yes. Working as self-employed without registering as a sole trader is against the law. Besides, an ato isolado ALWAYS comes with VAT. Do you really need that?”
Translated from Russian; the original is at the linktaxinportugal20.09.2024
As for income tax, the arrangement makes no difference at all. No retenção na fonte (tax withheld at source) needs to be deducted: withholding does not apply to category B income below €15,000 a year. And if your son files his own return and is not listed as a dependant on his parents' return, IRS Jovem applies to his income: a 100% exemption in the first year, capped at 55 IAS, which in 2026 is €29,542.15. The relief works the same way for wages (category A) and for income from a one-off transaction (category B). So there will most likely be no tax on this money whichever way it is paid; the only difference is in rights and contributions. He will still have to declare it: in the spring the amount goes into Anexo B of the return, in the "Ato isolado" section. How to fill it in is explained in the guide How to file your first IRS return in Portugal.
What to do now. First, ask for it to be done properly: an employment contract and wages for the month worked. The employer never had a choice in this, from the very first day: they are required to notify Segurança Social of a new worker no later than the day before work starts, whether or not anything has been signed. If the employer refuses, complain to the ACT, the Autoridade para as Condições do Trabalho (the working conditions inspectorate). A complaint can be made through the inspectorate's website, by letter to the district office or in person; it can come from the worker himself, a colleague or an outsider, and the complainant's name is not disclosed. What happens next is set out in Law 63/2013 of 27 August 2013: the inspector draws up a report and gives the employer 10 days to put the person on a proper contract. If they do, the case is closed; if not, within 5 days the file goes to the public prosecutor, who within 20 days brings a claim for recognition of an employment contract, without the worker having to take part. For a company this is a very serious offence under Article 548 of the Labour Code, and the fine is based on its turnover. Gather evidence of the work in advance: messages about shifts, the rota, photos from the kitchen, colleagues' names, any record of payments. If it goes to court, the guide How to find and check a lawyer in Portugal will help. And to be honest about the chat archive: in two years of conversations I did not find a single case of a month's wages being offered as an ato isolado. The transaction itself comes up all the time, but in connection with one-off fees, while disguised employment is discussed separately, under the name falsos recibos verdes. Nor has the tax office issued any clarification specifically about "wages as an ato isolado": what decides this is not a tax rule but employment law.
“There is no such thing in Portugal as "free income" if it is regular. For one-off, occasional earnings you can issue an Ato Isolado. For regular active income you have to either register as self-employed/a sole trader or have an employment contract.”
Translated from Russian; the original is at the linkreciboverde08.09.2023