The Portuguese Government has submitted to Parliament a proposal to amend the Vehicle Tax (Imposto Único de Circulação – IUC) regime, aiming to simplify tax compliance, reduce late payment penalties and ease the financial burden on households.
The proposal, approved by the Council of Ministers, establishes that the IUC will be due by the individual who owns the vehicle on the 1st of January of each year. The tax will be payable in April, with the option to pay in instalments, depending on the amount due.
Under the proposed rules, the IUC will be paid as follows:
- One instalment, in April, when the tax amount is equal to or below €100,00;
- Two instalments, in April and October, when the tax amount is above €100,00 and up to €500,00;
- Three instalments, in April, July and October, when the tax amount is above €500,00.
Once approved by Parliament, the new regime will enter into force in 2027, allowing taxpayers sufficient time to become familiar with and adapt to the new rules.
A transitional regime is in motion to prevent situations where taxpayers would be required to pay IUC relating to both 2026 and 2027 within a short period of time.
Accordingly, in 2027, the following transitional payment rules will apply:
- One instalment, payable in October, when the tax amount is equal to or below €500,00;
- Two instalments, payable in July and October, when the tax amount is above €500,00.
In the first year of application of the new regime, vehicle owners will only be required to pay the tax corresponding to the months during which the vehicle is registered in their name.