The Automobile Association of Portugal (Associação Automóvel de Portugal or ACAP) presented a proposal to phase out the vehicle tax (Imposto Sobre Veículos or ISV) over ten years until its complete elimination in 2036. Prepared in a study by EY, the plan suggests reducing the purchase levy by 10% annually while offsetting lost revenue through increases in the annual single circulation tax (Imposto Único de Circulação or IUC). The proposal seeks to modernize automobile taxation and reduce upfront costs for car buyers.
Auto Association Proposes Phasing Out Vehicle Purchase Tax
Tuesday, 6 October 2026AI summary
Context & Explainers
The IUC is the Imposto Único de Circulação (IUC), Portugal's annual vehicle circulation tax charged on cars, motorcycles and other vehicles. If you own or import a vehicle as an expat you must pay the IUC each year to the tax office (rates depend on age, engine size and emissions), and recent news says the payment date will be fixed on the calendar.
