Portuguese taxes on cars

Since 1988 there is in Portugal a tax called "Imposto Automóvel" (IA - Automobile Tax) that you indirectly have to pay when you buy a new car. The importer pays it to the government and includes it in the final price.

This tax is calculated multiplying the cubic centimeters (displacement) of the car's engine by a value minus a predefined value. You can see the current rates here (page 10).

One of the reasons why this tax is so criticized in Portugal is because IA is subject to Imposto Valor Acrescentado (IVA/VAT - Value Added Tax) at 21%.

When you buy a new car you pay: car's base price + IA + 21% IVA/VAT.

In 2006 the government in functions decided to add an "environment component" (Componente Ambiental) to the tax. It was still called IA (Imposto Automóvel), but 10% of the total tax income should be calculated regarding the car's CO2 emissions.

Next July (2007) this percentage will rise to 30%, and in January 2008 it should represent 60% of the total tax income. The tax name will change from IA to Imposto Sobre Veículos (ISV - Vehicle Tax).

Besides the rise of the environment component, the government decided that part of the tax should be transferred from buying to circulation.

Until now the income from circulation tax, called Imposto Municipal sobre Veículos (Vehicle City Tax), would go to the City where the vehicle was registered. The value of this tax is/was rather low. You can see the current rates here.

The tax due when buying a car (ISV) is expected to drop (average 10%), but the circulation tax, now called Imposto Único de Circulação (IUC - Unique Circulation Tax), payable every year, will rise substantially (average 300-500%). You can see the future rates here (ISV) and here (IUC).

Cars registered before July 2007 will pay IUC according to the current values forever. Cars registered after July 2007 will pay the new values.

Used vehicles imported from any Country pay ISV. When imported from an European Union Country there is a discount given based on age, the older the bigger discount. Starting July imported used vehicles will pay exactly the same IUC that new vehicles pay. This is an "effort" of the government to reduce the import of used vehicles (much more cheaper than new vehicles). You can see the discount percentages here.

If you're moving to Portugal, and you want to bring your car along, you're exempt from ISV. There are three conditions that you must meet to be exempt:
- you must be over 18 years old and have a driver's license for more than 12 months
- you must provide documentation that proves that you were a resident in another country for at least 12 months (a declaration from an official entity - such as an embassy, and some house bills/receipts or income/tax/social security documents)
- you can't sell the car for at least 12 months after portuguese registration

You'll have to visit personally the portuguese customs (Alfândega) and explain your intents. You can find Alfandega's several addresses here.

Sorry, but due to some time restrains, I'm not able to answer any further questions.

30.05.2007. 00:30

MelanieMix em 23.10.2016. 15:43

XRumer 12.0.19 is the BEST

George Nielsen em 30.09.2016. 15:22

Could someone please explain me in detail how ISV is calculated. For a vehicle with an engine larger than 1250 cc does one have to pay €1.03 per cc for the first 1250 cc minus €740.55 and €4.84 per cc minus €5362.67 or does one have to pay €4.84 per cc minus €5362.67 for the entire displacement of the engine, plus CO2 based tax.
- In the first case for a 1500 cc engine one would have to pay (€1.03X1250 - €740.55) + (€4.84x(1500 - 1250) - €5362.67) plus CO2 based tax.
- In the second case for a 1500 cc engine one would have to pay €4.84x1500 - €5362.67 plus CO2 based tax.
Thank you.

Mo em 05.05.2015. 08:25

I recently visited Alfândega (after a random Police stop) and proove I had been here less than 6 months. I now have 1 month to decide what to do with my UK car.

Its only worth £150 so all the costs to register don't seem worth it. I was told I could either: Register it officially; remove it from Portugal; or give it to them to die in their car graveyard!

On principle I hate to see a perfectly good car go to waste. Are there any other options? Am I allowed to take it apart and sell the pieces? Can I just take it to Spain for 6 months? Can I take it off the road and use it on my private land (as a sculpture as there is no room to drive it!).

Basically if it is not a car anymore, i.e. off road and non-functioning, can I keep it? Any other ideas!!!!

Thanks!

David Martin em 17.02.2015. 10:46

I'm interested in buying in Portugal, a used van (e.g. Ford Transit or whatever) from a dealer, for non-commercial personal use. If e.g. the price advertised was €10,000 with the comment 'Deduz IVA' what does that mean I would pay? Many thanks in anticipation.

Julio em 27.08.2014. 04:07

My response to all the taxes is this - I drivea bicycle and pay no taxes!

stuart morle em 05.04.2013. 08:08

Hello,

I have been living in Portugal for three years. I wish to buy a motorbike from a friend in Italy and import it to Portugal. I can bring it here under his registration and insurance, but I am unclear about what to do when I get here as the documents will not be in my name.

Can anyone kindly help me?

Thank you!

Stuart (stuartmorle@gmail.com)

peter em 07.02.2012. 18:47

Funny no one says anything about the tax. ISV is illegal under the EU's first rule that states that no goods within the EU may be taxed two times, Portugal is doing it with this tax,ISV. All used cars are understated in the country they were purchased for the first time,,, This tax, ISV is also discrimination against the portugues people when they can not afford imported cars, which all the citizens of other EU countries can do

José Carlos Sanches em 07.03.2011. 17:17

PB, it will be best to contact some agency who is abble to answer to your doubts. I don't think that you need the "law" it self, but if you ask your doubts it will be better.

Cumprimentos
José Carlos Sanches
www.autodoc.pt
Documentação Automóvel desde 1994
Lisboa/Setubal

PB em 06.03.2011. 14:22

Many thanks for these useful informations. Could someone please provide the official portuguese text of law (link ?) saying that citizens of other countries who are bringing their own car are exempt from paying the ISV (provided they meet the 3 conditions at the top of this page) ?

Many thanks.

PB em 06.03.2011. 14:20

Many thanks for these useful informations. Could someone please provide the official portuguese text of law (link ?) saying that citizens of other countries who are bringing their own car are exempt from paying the ISV (provided they meet the 3 conditions at the top of this page) ?

Many thanks.

carlos em 18.05.2010. 18:14

I would like to know how much i will pay to regester a BMW 320D from 2005.Im planning to go back to portugal in 2 years time, ive been in the UK now for 5 years and would like to benifit from the imigrant status. What do i need to get the required documents.

Thank you

kim howard em 13.04.2010. 09:13

hello,
i am moving to faial, azores with my girlfriend and we both are bringing a car. i have owned my car for longer than 12 months and bought it in germany. my car should be exempt from taxes and considered to be moving goods- is that correct?

the other car is a
ford TTS / LKW e plano Diesel
erst zulassung/até aprovação - 21.12.2009
hubraum/capacidade - 2496cm3
CO2 in g/km - there are no values written in the papers
the cost of the car - €1300,-
2 seats

would you please help me figure out the cost? i am not sure under which table to use. thank you for your help,
kim howard

Daniel em 23.01.2010. 00:19

Hi,
I live in the USA but I'm thinking of moving to Portugal and sending a car with me, do you know what is needed?
Thanks

Charlie em 29.12.2009. 14:22

"As a tourist, you may keep your vehicle in Portugal for a maximum of 180 days in any 12-month period provided it is for your own private use and you do not loan it to anyone else during that period. Do not depart leaving your vehicle unaccompanied. If you do, you may be subject to a fine...."

The above is taken from the Foreign office website advice to british citizens driving in Portugal. My situation is very similat to that of Miles (10.04.08) and what I would like to know is; what does 'unaccompanied' mean? While I am out of Portugal, the vehicle will be stored in a private garage. Does this count as unaccompanied?

Regards

Charlie

Petros em 28.07.2009. 17:38

Hi, i have just found a car of 1996, CC 1.400 that i wanna buy here in Oporto. I was wondering how much taxes I should be calculating to pay per year because I have heard something about increasing fo cars before 2000.

Thank you in advance

Marco em 22.04.2009. 13:29

Hi, I'm living and working in Portugal since 2005 and was driving my car with a german number plate, which was certainly not correct.

In Feb. the GNR knocked on my door. They blocked the car and fined me with € 170 which I've paid already. Now I have to legalize the car and went to the "alfandega". They said my possibilities are legalize for € 5.400, export or abandon. Since the car is from 1999 it's not worth to spend cash on it. Question: do I have any chance to legalize it without paying taxes???? Tx, Marco

Dirk Elias em 01.03.2009. 13:40

Hallo,

I moved my residence from Germany to Portugal and we (my wife & me) brought our cars, that both are more than 15 years old and we own them for more than 2 years.
We had no problem NOT to pay the ISV, but now we are asked to pay the IUC as if the car would be new (although a Portuguese, that would own the car for the same period would be taxed based on the old system)

As we did not buy an 'used imported' car and just changed residence, we feel this to be very unfair.

In the 'Certificado de Matricula' it is also correctly mentioned the date of the 'primeira matricula' (1985 & 1990) and of course we are able to proof, that we had the cars before July 2007 (change of the IUC handling) licensed to our names in Germany.

As we plan to live here for a longer time, I would not mind to go to court (breaking of EU lwas with regrads to freedom of movement an/or equal treatment), but of course if there is an argument, that can convince the 'Financias' without, I would prefer...

Cheers

Dirk

Barry Henderson em 18.02.2009. 00:00

My wife and i now live in portugal. We have owned an apartment in portimao now for 2 years. We are british but own a spanish registered motor home, (spanish plates) We have the motor home parked at our apartment and we are worried the police will impound the vehicle if we drive it . Could it be isv exempt. We own a portugese registered car. We would like to use the motorhome what should we do.

Rob em 24.01.2009. 16:44

@ John Sullivan.

As your posting is from 10/2008 you already know by now how much ISV you would have to pay for your 9 years old Honda Prelude.
Nevertheless, I made the calculation for you and it would be approx. €8500. I consider that as a lot of money for that car.
(I did the calculation for a Honda Prelude MY 2000 ; 1997 cc ; CO2 emission 220 g/km)

Rob em 24.01.2009. 16:25

@ Ronald.

It makes a lot of sense what John Sullivan said. If a EU-citizen changes his residence from one EU memberstate to another he doesn't has to pay the ISV. Of course there are a lot of conditions but one of those is, that the car you're importing must have been registered in your name for at least 12 months counting back from the date you become resident in Portugal.
From 010109 importing a car in Portugal became VERY expensive because the government did find a really briljant way to calculate the ISV you have to pay. Even for a car from 9 years old as John's is !
By the way I'm not a native (English) speaker but I gave it my best. ;-)

Ronald em 09.01.2009. 00:58

What a shame. Maybe someone else can post a comment clarifying this statement from above which makes no sense to me:

"Used vehicles imported from any Country pay ISV. When imported from an European Union Country there is a discount given based on age, the older the bigger discount. Starting July imported used vehicles will pay exactly the same IUC that new vehicles pay. This is an "effort" of the government to reduce the import of used vehicles (much more cheaper than new vehicles)."

= The discount for used, imported vehicles from the EU goes still (in 2009) up to 6years/52%.
= As far as I understand this, ALL vehicles in P, whether imported or not, uswe or new, pay the yearly road tax IUC, which is fixed.

So what's the big difference? How will the efforts of the government affect in any way the importation of used vehicles?

John Sullivan em 29.10.2008. 20:53

Hi
I have been resident in Gibraltar for the last 15 years and was going to buy a car here and take it with me when I retire to Portugal approximately July/August next year. Having been informed of your excellent website it appears that this is not now possible as I would have not had the car for 12 months. I will now have to use my present car which will be 9 years old when I move to Portugal, it has a 2 litre petrol engine (Honda Prelude) Could you please give some idea how much it will cost to bring it into the country. Unfortunatley my command of Portuguese is not good yet so I am unable to use the tables for calculating the costs involved. I notice in one of your answers you mentioned an "Agência de Documentação" Would one of these "agencies" be able to help me with the paperwork importing the car? My plan now after the 12 month period is to sell my old car and buy one in Portugal.

This is a really good website for people in our position, keep up the good work.

Thanking you in advance.

John Sullivan

Millie em 18.09.2008. 22:39

Hi Doug,

I've been waiting for a reply from this site for months - shame, they used to be so quick and friendly - I would say for sure that your MoT from Portugal is not valid for insuarace purposes, or driving. Safest bet must be get a UK ticket! That said, if you get favourable reply from DVLA, please post here!!!!

Good Luck,

Millie

doug em 14.09.2008. 19:18

Would you know is Portuguese MOT is valid in UK ?

I was in Portugal with my car between Feb 08 and May 08 and my UK MOT was expiring on 06th March and I simply went to Portimão MOT station and put my vehicle through. Now I am back to UK and I emailed and Faxed my question to UK Dvla but still no reply from them two weeks later

doug em 14.09.2008. 19:16

Would you know is Portuguese MOT is valid in UK ?

I was in Portugal with my car between Feb 08 and May 08 and my UK MOT was expiring on 06th March and I simply went to Portimão MOT station and put my vehicle through. Now I am back to UK and I emailed and Faxed my question to UK Dvla but still no reply from them two weeks later

Millie em 17.07.2008. 23:18

Hello,If I move to Portugal, import my car, and qualify for tax exemption because of my previous EU residency, what happens if I want to buy a new car, and sell the car I imported?? Can I do this without penalty?? Thanks.

FD em 02.06.2008. 10:05

The table B is applicable to two types of vehicles:
- new cars that don't have CO2 emissions homologation (vans, etc.)
- imported cars which first registration in the country of origin was before 1970

Paul em 28.05.2008. 21:51

Hi,
Thanks for the reply. What does table b refer to, please? Just commercial, or non homog. as well?
Esta é a tabela B, aplicada a todos os veículos cujas emissões de CO2 não estejam homologadas, nomeadamente todos os veículos comerciais sujeitos ao imposto

FD em 28.05.2008. 10:41

Reply to R van der Heijden em 28.05.2008. 00:31:

There are two distinct situations:

- people that bought a (new/used) car before July 1st 2007, beginning January 1st 2008 have to pay the IUC on the license plate month or date of 1st registration in Portugal (if they don't coincide).

- people that bought a new car from 1st July 2007 forward, have to pay IUC for the first time (only) up to 90 days counting from the date of the license plate and every succeeding year on the license plate month.

I hope that was clear.

FD em 28.05.2008. 10:29

Reply to Paul em 27.05.2008. 18:41:

You have to pay ISV accordingly to the engine displacement and CO2 emissions.
When inspected, as part of the legalization/registration process, the CO2 emissions will be measured/analyzed and the result will be used to calculate the payable tax amount.

Being an older vehicle, with a large engine displacement, you can expect a high CO2 value so, be aware that the tax amount will be substantial.
You can find the current rates here (first two tables): http://impostosobreveiculos.info/tabela-imposto-sobre-veiculos/

Imagine that the car's CO2 emissions are 300g/km (not unusual). Just for your reference, you would have to pay 4621,50€ just for the ISV.
Don't forget the annual tax, the IUC, which would be, using the above values, 561,60€/year.

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