The Imposto Único de Circulação (IUC), also known as the car seal, cannot be charged to the previous owner, according to a decision by the Constitutional Court (TC), published at the end of last week.
In practice, the TC’s decision concludes that the rule stating the IUC must be paid by the person in whose name the property is registered violates the Constitution, allowing taxpayers to provide evidence to the contrary.
This means that the IUC cannot be charged to the former owner, respecting the constitutional principle of tax equality.
“As stated, it is decided: a) To deem unconstitutional the rule of Article 3, no. 1, of the IUC Code, approved by Law no. 22-A/2007, dated June 29, in the wording resulting from Decree-Law no. 41/2016, dated August 1, in the interpretation that the tax should be charged to the person in whose name the property is registered, regardless of who the effective owner is, due to violation of Article 13, no. 1, and Article 103, no. 1, of the Constitution of the Portuguese Republic,” reads the decision.
This decision is for a specific case, but this understanding is expected to apply to future decisions on similar cases.
Government Already Approved Changes to IUC
The Government approved changes related to the payment of the Imposto Único de Circulação (IUC) on Thursday, as the Ministry of Finance had previously indicated. What is going to change? Simply put, the payment will no longer be due in the month of vehicle registration and will switch to a single payment date—but not immediately, these changes will only take effect in 2027.
What will change, in simple terms, is that the IUC will no longer be due in the month of the vehicle registration but will have a single payment date—and can also be paid in installments. Understand everything here.
The Executive approved, in the Council of Ministers, “a Draft Law of legislative authorization to amend the provisions of the IUC Code relating to the settlement of the tax, which is due on the vehicle’s registration anniversary,” according to a statement sent to newsrooms.
“Since this model is likely to generate operational and administrative constraints and increases the risk of unintentional non-compliance, the regime is altered,” states the government led by Luís Montenegro.
In practice, the IUC payment schedule will be as follows:
- The IUC is paid in one installment in April when its amount is equal to or less than €100;
- In two installments, in April and October, when the amount is greater than €100 and equal to or less than €500;
- In three installments, in April, July, and October, when the amount is greater than €500. “Anyone who owns a vehicle on January 1 of each year will pay the IUC in April,” explained the Minister of the Presidency, António Leitão Amaro, on Thursday at a press conference after the Council of Ministers.
