How to split the arguments of a command over multiple lines

Do give

requirement%
{R1: Should display available products}%
{MVP}%
{Interview with client}%
{At the front page of the webshop there should be a grid 
 displaying the available products.}%
{Users visiting the site need a way to discover products.}

While you're at it, do please also change

newcommand{requirement}[5]{

to

newcommand{requirement}[5]{%

---

A full minimum working example -- note that I've applied a few additions of the basic housekeeping variety to your code -- and its output:

documentclass{article}
newcommand{requirement}[5]{%
begingroup
setlengthparindent{0pt}
    vspace{1cm}
    parnoindent
    {largetextsf{textbf{#1}}par}

    textsc{Type: #2 | Supported by: #3}

    textsf{Description:}

    #4

    textsf{Justification:}

    #5
endgroupparvspace{1cm}
}

begin{document}

requirement
{R1: Should display available products}
{MVP}
{Interview with client}
{At the front page of the webshop there should be a grid displaying the available products.}
{Users visiting the site need a way to discover products.}

end{document}

The problem is, that you had a completely blank line inside one of the arguments or between two arguments. A completely blank line (not counting spaces) turns into a par. A single newline just turns into a space, so is no problem for your arguments (spaces between normal arguments are ignored).

So, you can split them across lines just fine, e.g., with:

requirement
{R1: Should display available products}
{MVP}
{Interview with client}
{At the front page of the webshop there should be a grid displaying the available products.}
{Users visiting the site need a way to discover products.}

The following would be fine as well:

requirement
  {R1: Should display available products}
  {MVP}
  {Interview with client}
  {%
    At the front page of the webshop there should be a grid displaying the
    available products.%
  }
  {Users visiting the site need a way to discover products.}

(note that I used a % to remove the space at the start and end of the fourth argument, which would be caused by the newline)

And you can ignore an otherwise blank line by putting a % in it, so the following works as well, as there are no implicit par tokens (the % doesn't have to be the first thing in the line, spaces at the start of a line are ignored, just putting % in the line removes the par):

requirement
  %
  {R1: Should display available products}
  %
  {MVP}
  %
  {Interview with client}
  %
  {%
    At the front page of the webshop there should be a grid displaying the
    available products.%
  }
  %
  {Users visiting the site need a way to discover products.}

---

Please note that your usage of large in the code you provided is wrong, large has to be put into a scope if you don't want to turn the rest of the current group/document into large. Also, I'd use explicit par tokens in the definition of a macro, instead of two consecutive newlines:

newcommand{requirement}[5]{%
    vspace{1cm}%
    {largetextsf{textbf{#1}}par}%
    textsc{Type: #2 | Supported by: #3}par
    textsf{Description:}par
    #4par
    textsf{Justification:}par
    #5par
}

---

You might want to consider using a description environment for your output. The following uses enumitem to customise the used description environment.

documentclass[]{article}

usepackage{enumitem}

newcommandrequirement[5]
  {%
    vspace{1cm}%
    {largesffamilybfseries#1par}%
    textsc{Type: #2 | Supported by: #3}par
    begin{description}[font=normalfontsffamily,nosep,style=nextline]
      item[Description:] #4
      item[Justification:] #5
    end{description}%
  }

begin{document}

requirement
  {R1: Should display available products}
  {MVP}
  {Interview with client}
  {%
    At the front page of the webshop there should be a grid displaying the
    available products.%
  }
  {Users visiting the site need a way to discover products.}

end{document}

There is no way your code can produce the error. The error can be reproduced almost the same by typing

requirement

{R1: Should display available products}
{MVP}
{Interview with client}
{At the front page of the webshop there should be a grid displaying the available products.}
{Users visiting the site need a way to discover products.}

---

On the other hand, your code is weak under many respects.

1. You're declaring large which will affect the whole document from the first call of requirement on (bounded only by a group end).

2. All paragraphs are affected by the standard indentation; maybe you're setting parindent to zero, but it would be better to state noindent anyway.

3. vspace is best issued between paragraphs; however, you should use addvspace, so this wouldn't add to other vertical spaces defined with the same addvspace macro (for instance after a section title).

4. Blank lines inside a definition can be used, but they make par and you don't want page breaks in the middle of a requirement.

Here's a fixed version. You can type each argument in a new line, but leave no blank lines between arguments. Leaving a couple of spaces in front of each argument is, in my opinion, better, in order to ease reading the code.

I don't find 1cm a good spacing, where bigskipamount would be probably better.

documentclass{article}

newcommand{requirement}[5]{%
  par% <--- very important
  addvspace{1cm}% better than vspace in this case
  noindent{largetextsf{textbf{#1}}par}nopagebreak
  noindenttextsc{Type: #2 | Supported by: #3}*
  textsf{Description:}*
  #4*
  textsf{Justification:}*
  #5par
}

begin{document}

requirement
  {R1: Should display available products}
  {MVP}
  {Interview with client}
  {At the front page of the webshop there should be a grid displaying the available products.}
  {Users visiting the site need a way to discover products.}

end{document}