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
Bom Dia,
My friend lives in England, when he comes to visit me, may I drive his English registered car – I am Portuguese/English resident, but with a UK driving licence, because I spend four months every year in England.
I’m a bit confused, I don’t want to be in trouble.
Obrigada,
Maxine
FD em 22.04.2008. 10:59
If you stay more than 183 days per year in Portugal - like you say you do, from what I'm understanding - by this law, you're considered a portuguese resident. Therefore, you can't drive any vehicle with a foreign license plate, exactly like any other portuguese resident.
Even if you spent less than 183 days in Portugal, as long as you earn money or work in Portugal, you're considered a resident too.
Furthermore, only relatives of the foreign vehicle's owner can drive it, unless it's a lease or a rental.
Hi,
I read your reply to Maxine and have a few questions of my own.
Can you please give me the reference of the legislation that forbids Portuguese residents from driving foreign registered cars, please.
Secondly, could you define relative. For example, is father-in-law a relative – my wife drives her Fathers car, may I, as a Portuguese resident?
Finally, can you confirm that it is permissible for a Portugeuse Resident to use a foreign registered car provided by an employer, if that car is used essentially for business.
Thanks for your help.
FD em 29.04.2008. 13:05
The law that regulates what you're asking is "Lei 22-A/2007", look for Capítulo V Regimes Suspensivos (page 4164-(13) - PDF 12/29). You can find here: http://www.dre.pt/pdf1sdip/2007/06/12401/00020030.PDF
Relatives: partner (wife, husband, etc.), first degree ascendants (father, mother) and descendants (sons). To my understanding, as to what this law concerns, father-in-law isn't considered a relative, but I think when in the presence of both you shouldn't have any problems with police authorities. Regarding this, you should read nr. 2, 30th article of the forementioned law.
As long as you're a portuguese resident you can't drive any foreign car in Portugal, even in the situation you're referring to.
I have a 21 year old Range Rover which decided to retire in Portugal August 2006.It broke down on private property and was then taken by transporter to a garage. They think they have fixed it but advise against s trip back to England. I have declared a SORN in England when the UK tax ran out but need to know what to do now we know it is not returning. We have property in Portugal where it would make a good air conditioning unit[!] and possibly be a run-about to the local shops. What is our situation re tax please with either option?
If it is taken by car transporter from the garage to our property without any Portugese tax having been paid is that acceptable within the law? At what age does tax cease to become payable? Finally if we do manage to become roadworthy how much is the tax likely to be [3.5 engine] Many thanks RD
FD em 16.05.2008. 10:13
As long as the driver and owner doesn't work, earn any money, or reside in Portugal for more than 183 days per year, you can drive a foreign car without any problems, considering it's legal in it's country of origin - MOT certified, insurance, etc.
If the car stays in Portugal for more than 183 days per year, you'll have to pay IUC, the portuguese annual road tax. It's based on engine displacement and CO2 emissions.
You can drive it from the garage to your property without any problems as long as the above conditions are met.
For you to be able to drive it without any restrictions in Portugal, you would have to legalize it, but the cost of that procedure, specially in this case because of the vehicle characteristics (pollution and engine capacity), is absurd. You could expect to pay around 5.000€ just to get license plates, and around 550€ every year for road tax (IUC). With 550€ you can rent a new car almost every time you come over here.
From July 2007 forward, the road tax (IUC) is payable by every newly registered/legalized car, be it manufactured in 1900 or in 2008, they pay exactly the same. It's this way to prevent the import of "european junk/scrap" as the government puts it.
Hi,
I would like to import an older car, 3000cc, from 1979. The car has no record of CO2 emmissions.
Would the ISV calculation be, for 2008:
3000xEur 9.25 x 20% then deduct 9199.88?
Thanks in advance,
Paul
R van der Heijden em 28.05.2008. 00:31
Dear FD,
On this site I have read the following
Se comprou carro a partir do dia 1 de Julho de 2007 tem a partir de agora as seguintes obrigações:
• pagar o IUC num prazo máximo de 90 dias após a data da matrícula
• pagar o IUC todos os anos no mês da matrícula do carro
"They" told me that, since the 1st of January 2008, you have to pay the IUC in the month
that is mentioned on the Livrete or the Certificado de Matrícula.
Please help me out because I don't understand what's the difference between the two options mentioned above.
Best regards
Rob
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.
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.
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 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
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.
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
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
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
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
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