ISV and IUC in Portugal: the complete tax guide for importing a car

Anyone importing a car into Portugal pays two separate taxes: ISV (Vehicle Tax), paid once at registration, and IUC (Single Circulation Tax), paid every year after that. They're different taxes, with different calculation bases, and frequently confused with each other. This guide explains both in detail — without inventing exact figures, because the tables are updated annually and the only reliable place for an exact number is always the simulator with the current data.

What ISV is and when it's paid

ISV applies to motor vehicles at the moment they're put into use in Portugal. For a new car bought at a Portuguese dealership, ISV is already included in the sale price. For a used car imported from another EU member state — the case for most of our clients — it's the importer, through a licensed customs agent (to whom they give a mandate), who settles it with the Tax Authority, via a form issued by the customs agent.

The calculation rests on two main components that add together: one linked to engine displacement (the larger, the higher the component) and another to CO2 emissions (the higher the emissions, the higher the environmental component). A percentage reduction is then applied based on the vehicle's age since first registration — the older the car, the bigger the reduction, but never enough to bring the tax to zero based on age alone.

WLTP vs NEDC — why the protocol matters

The simulator always asks whether the vehicle is approved under WLTP or NEDC — two different CO2 emissions measurement protocols, used in different periods of car production. WLTP is the more recent and stricter one. ISV tables have different values depending on the protocol, because the CO2 figures resulting from each aren't directly comparable. Mixing up the two significantly changes the final calculated value — which is why this detail, available on the vehicle's Certificate of Conformity, is always requested before any estimate.

Exemptions and reductions: electric, hybrid and more

Fully electric vehicles benefit from a full ISV exemption — both on the engine-size component (which doesn't even apply, since they have no combustion engine) and the environmental component. It's one of the biggest tax incentives for electrifying Portugal's car fleet, and it extends to annual IUC too, as we'll see next.

Plug-in hybrids (PHEVs) don't get a full exemption, but can benefit from a substantial reduction on the engine-size component when they meet two criteria simultaneously: a minimum electric-only range and a maximum CO2 emissions limit. Outside these criteria, a PHEV is taxed as a conventional combustion vehicle.

What IUC is and how it's calculated

The Single Circulation Tax is an annual charge, paid directly to the Tax Authority from the year after first registration — and never part of the value calculated at the time of import, precisely because it's a recurring expense, not a one-off entry cost. The calculation depends on the vehicle's category (defined by the date the current IUC Code came into force, 29 June 2007, and by vehicle type), engine size or power, and — for vehicles registered from 2017 onward — an additional component linked to CO2 emissions.

As with ISV, fully electric vehicles are exempt from IUC. The tax advantage of choosing an electric vehicle isn't limited to the moment of purchase, then — it continues every year after that, which can represent a significant accumulated saving over the vehicle's useful life.

ISV vs IUC — a direct comparison

	ISV	IUC
When it's paid	Once, at registration	Every year, from the following year
Calculation basis	Engine size + CO2 + age reduction	Category + engine size/power + CO2 (registrations ≥2017)
Part of the import cost?	Yes, part of the CTPP	No — a separate recurring expense
Exemption for electric vehicles	Full	Full
Reduction for plug-in hybrids	Yes, conditional	Not directly applicable

Companies: what changes

For companies, the tax treatment of importing vehicles has additional nuances — namely around VAT deductibility and how ISV is treated depending on the vehicle's use (exclusive business use vs mixed use). These rules carry enough weight to justify their own article — link available in the related articles below.

Why two "similar" cars can have very different ISV

It's common to compare two listings with similar purchase prices and assume the total import cost will be similar too. In practice, small differences in engine size, CO2 emissions or even the homologation protocol used on the manufacturer's certificate can lead to quite different ISV values between two vehicles in the same segment. An SUV and a city car from the same brand start, by definition, from very different points on the table — and that gap tends to grow once the environmental component of a more powerful engine is added. That's why comparing only the listing price, without simulating the specific ISV for each candidate, is the most common mistake at this stage of the search.

Frequently asked questions

Can ISV be refunded if I sell the car shortly after?

There's no automatic ISV refund from selling the vehicle — the tax is tied to putting it into use, not to continued ownership. There are specific regimes for the vehicle's definitive export that can apply in particular situations, but they're not the common scenario for someone buying for personal use.

If I import a very old car, do I always pay ISV?

Yes — the age reduction lowers the amount due, but doesn't eliminate it based on age alone. There are exemption regimes tied to other criteria (such as historic vehicles under very specific conditions), but they don't apply to the general case of a standard import.

Where can I confirm the exact figure for my case?

On PuraRota's simulator. By entering the engine size, CO2 emissions, homologation protocol (WLTP or NEDC) and first registration date of the vehicle you're considering, the calculation engine automatically applies the current tables and returns an estimated ISV and IUC value — always broken down, never a single number without explanation.

6 key takeaways

1. ISV is paid once, at registration; IUC is paid every year, starting the year after.
2. ISV adds an engine-size component to a CO2 component, reduced based on the vehicle's age.
3. The homologation protocol (WLTP or NEDC) changes the calculated value — it should never be assumed, always confirmed on the Certificate of Conformity.
4. Fully electric vehicles get a full exemption from both ISV and IUC; plug-in hybrids can get a conditional reduction on ISV only.
5. Only IUC for vehicles registered from 2017 onward has an additional CO2 component.
6. The tables for both taxes are reviewed annually — any figure should be confirmed in the simulator before deciding.