Two separate taxes apply to a car in Portugal: ISV, paid once when the car is first registered here, and IUC, paid every year for as long as it stays registered. Both matter when you are working out what a car really costs — especially if you are importing one.
Vehicle tax (ISV)
ISV — Imposto Sobre Veículos — is a one-off tax due when a vehicle is registered in Portugal for the first time, whether it is new or used. It has two components:
- Engine capacity, charged per cm³ within bands
- Environmental, charged on CO₂ emissions, measured under NEDC or WLTP
Which table applies depends on the vehicle. Table A covers passenger cars and light mixed-use vehicles, Table B certain light commercial vehicles, and Table C motorcycles, tricycles and quadricycles.
Reduced ISV rates
Some vehicles pay a percentage of the full amount:
- 60% — hybrids with an electric range over 50 km and emissions below 50 gCO₂/km
- 25% — plug-in hybrids with a range of 50 km or more and emissions below 50 gCO₂/km, or below 80 gCO₂/km under Euro 6e-bis
- 25% — plug-in hybrids first registered in an EU member state between 2015 and 2020 with an electric range of at least 25 km
- 40% — vehicles running on natural gas
Importing a used car
A used car brought in from another EU member state pays less ISV the older it is. The reduction comes from Table D, a single scale applied to the whole tax — the engine-capacity component, the environmental component and the diesel surcharge alike.
It starts at 10% for a car up to a year old and reaches 80% after ten years.
Annual road tax (IUC)
IUC — Imposto Único de Circulação — is due every year while the vehicle stays registered. How it is worked out depends on when the car was first registered:
- Category A — light passenger and mixed-use vehicles under 2,500 kg registered between 1981 and 30 June 2007: engine capacity only
- Category B — vehicles registered from 1 July 2007: engine capacity and CO₂ emissions
When to pay IUC
Until the end of 2026, IUC is due by the end of the month your car was registered in, every year. Not the month before — the registration month itself.
For a car registered or imported for the first time, the deadline is different: you have 30 days after the legal registration period ends. The same 30 days applies to a vehicle brought back into service. Payment goes through the Portal das Finanças.
From 2027 the date no longer follows the registration month. Under Decree-Law 161/2026 the tax is assessed once a year for each owner, covering every vehicle registered on 1 January, and paid in April if the total is €100 or less, in April and October up to €500, and in April, July and October above that — or all at once in April. 2027 is a transition year: a single payment in October up to €500, otherwise July and October, or all in July. In the year a car is first registered here, the tax is reduced in proportion to the full months that passed before its registration date.
Imported cars and IUC category
Since 1 January 2020, a car registered in Portugal on or after 1 July 2007 whose first registration in an EU or EEA country was before that date is taxed in category A rather than category B. In practice this usually means a lower bill, because category A ignores emissions.
Exemptions
- Fully electric vehicles and vehicles running on renewable energy are exempt from IUC
- Historic vehicles — over 30 years old, recognised as being of historic interest, and driven no more than 500 km a year
- Disability — an incapacity of 60% or more qualifies, for one vehicle a year, capped at €240 and subject to emissions limits of 180 gCO₂/km under NEDC or 205 gCO₂/km under WLTP
- Taxis and chauffeur-driven hire cars, under conditions
ISV has its own exemptions, including transferring your residence to Portugal, disability of 60% or more, and diplomatic staff.
What you will need
- The vehicle registration document (Documento Único Automóvel, DUA)
- Technical specifications including CO₂ emissions, which the environmental component depends on
- Proof of the first registration date, which decides both the ISV reduction and the IUC category
- A Certificate of Conformity (CoC) for an imported vehicle
Before you buy
Treat ISV as part of the purchase price and IUC as a running cost, and check both before committing. On an imported car the age-based ISV reduction can be substantial, but it is worth weighing against condition and what the car will need spending on. Fuel type, engine size and emissions move both taxes at once.
Rates change only when a budget law amends them; the current ISV and IUC tables date from the 2024 budget (Law 82/2023). The ISV code was last amended by Law 73-A/2025, in force from 1 January 2026.