IUC: how Portugal’s Single Circulation Tax works

Introduced in 2007 - specifically on 1 July 2007 - the Single Circulation Tax (IUC) replaced three existing taxes at once: the Municipal Vehicle Tax (the well-known “Selo”), the Circulation Tax and the Haulage Tax.

Its purpose is straightforward: it is intended to offset both the wear vehicles cause to infrastructure and their environmental cost. It is charged directly on vehicle ownership and only ceases to be payable when the registration is cancelled.

The IUC is compulsory for a range of vehicles, including cars, motorcycles, pleasure craft and even privately used aircraft. For cars, however, only fully electric models are currently exempt from the well-known IUC, as engine capacity and emissions - two components used to calculate it - do not apply to electric cars.

IUC categories

There are seven categories in total, from A to G. For passenger cars, only the first two are relevant: categories A and B.

Category A covers passenger cars first registered in Portugal, another European Union country or the European Economic Area between 1981 and the date the IUC came into force - up to and including 30 June 2007.

Category B includes all passenger cars first registered in Portugal, an EU Member State or the European Economic Area after the IUC entered into force. In other words, it applies to all cars registered from 1 July 2007 onwards.

How is the IUC calculated?

The IUC is worked out using the tax rates published each year in the State Budget, which differ according to the vehicle category.

For category A cars, the calculation takes account of fuel type, engine capacity and registration year, using set bands. For category B vehicles, the formula includes fuel type, registration year, engine capacity and CO₂ emissions, also assessed by band.

Working out the amount

To calculate the IUC due, you must check the rates for the relevant category and identify those that apply. For a category B car, this means establishing its engine-capacity and CO₂ bands. The table below sets out the rates applicable to category B cars:

Diesel-powered cars are subject to an additional charge, introduced in 2014, which varies according to the vehicle’s engine capacity.

Cars registered after 1 January 2017 are also liable for a further additional charge based on their CO₂ emissions.

Finally, the following table shows the coefficient linked to the date of first registration:

The calculation is then as follows: add the rate for the engine-capacity band to the rate for the emissions band, together with the additional charge for vehicles exceeding 180 g/km and registered after 1 January 2017 where applicable. Multiply this total by the coefficient for the year of purchase, then add the additional diesel-engine charge where relevant.

If this sounds complicated, there is a simpler option. As might be expected today, an online calculator can immediately work out how much you need to pay: impostosobreveiculos.info.

When is the IUC paid and what happens if it is not paid?

Normally, the IUC must be paid by the end of the month in which the registration date shown on the vehicle registration document (DUA) falls. The exception is the first IUC payment after buying a new car or an imported used vehicle. In that case, you have 30 days after the deadline for registration to pay the IUC.

What happens if I do not pay?

If a car owner does not pay the IUC, the vehicle and its circulation documents may be seized or immobilised. This remains in force until the tax, the fines arising from non-payment, and the costs of removing and storing the car have all been settled.

Are there exemptions?

In short, yes. The IUC code exempts taxis, classic cars and fire service vehicles from payment. Owners with a disability rating of 60% or above are also exempt, as are cases where the amount due is less than 10 euros.

Sources: impostosobreveiculos.info; E-Konomista.