The Council of Ministers approved changes last week regarding the payment of the Single Circulation Tax (IUC). The tax will no longer be paid in the month of the vehicle’s registration.
Finance Minister’s Explanation
On Friday, the Finance Minister addressed questions about the IUC, noting that a “tax simplification agenda was presented at the beginning of this year.” There will now be “a change only in the method of payment.”
“The tax will remain exactly the same value. In fact, the tax has not been increased, not even at the rate of inflation, for two years, both in the 2024 budget and in the 2025 budget,” he stated.
The change is aimed only at “simplifying,” with the IUC defined as “a single payment in April, if the amount is up to 100 euros, two payments in April and October if it is between 100 euros and 500 euros, and three annual payments if it exceeds 500 euros.”
Changes to Begin in 2027
These changes, approved by the government, will not take effect until 2027, contrary to previous plans for the next year. The Minister of the Presidency, António Leitão Amaro, explained last week that “a transitional regime in 2027 will prevent situations where taxpayers have to pay IUC for both 2026 and 2027 in a short period of time.”
“The idea is for the payment not to be made in the registration month—which varies for different vehicles—but rather to have a fixed month, as with most other taxes paid by the Portuguese,” he further explained in the same address.
“To be clear” and “to prevent fake news,” Leitão Amaro emphasized that “the changes in the IUC do not imply any tax increase. On the contrary, they simplify the way Portuguese pay this tax,” he noted.
A New Schedule
In practice, the IUC payment schedule will be as follows:
- The IUC will be settled in a single installment in April when the amount is 100€ or less;
- In two installments, in April and October, when the amount is greater than 100€ and up to 500€;
- In three installments, in April, July, and October, when the amount exceeds 500€.
“Ownership of a vehicle as of January 1 each year means paying IUC in April,” explained António Leitão Amaro on Thursday during a press conference after the Council of Ministers meeting.
He continued the clarification: “If the IUC due is up to 100 euros, it is paid in April; if it is between 100 euros and 500 euros, it is paid in two installments in April and October; if it exceeds 500 euros, it can be paid in three installments: April, July, and October.”
The proposal now moves forward to the Assembly of the Republic.
