Vehicle Taxation in Portugal 2026: ISV, IUC and Tax Impact
ISV, IUC and the tax impact of buying a vehicle
Buying a car in Portugal goes far beyond the sticker price. The Portuguese vehicle tax system is one of the most complex in Europe, combining a one-off registration tax - ISV - with an annual circulation tax - IUC. Together, they can represent thousands of euros in the first year of a vehicle's life, varying significantly depending on fuel type, engine size, CO₂ emissions and vehicle age.
This article clearly explains how these two taxes work in 2026, the current tax tables, how to calculate the amount due and strategies to reduce the tax burden when buying a vehicle.
Use our Vehicle Tax Simulator 2026 to instantly calculate ISV and IUC for the vehicle you want to buy.
1. What is ISV?
ISV (Imposto Sobre Veículos) is charged once, when a car is first registered in Portugal. It applies to new vehicles purchased from national dealers and used vehicles imported from other countries, including those from other EU member states.
ISV is calculated based on two independent components that are added together:
1.1 ISV Table - Cylinder component (petrol)
| Bracket | Engine (cc) | Rate (€/cc) | Deduction |
|---|---|---|---|
| 1st | Up to 1,250 | €3.87 | €3,483.00 |
| 2nd | 1,251 – 1,750 | €7.29 | €7,763.25 |
| 3rd | 1,751 – 2,600 | €15.99 | €22,986.75 |
| 4th | Over 2,600 | €28.84 | €56,400.75 |
1.2 ISV Table - CO₂ component (petrol)
| Bracket | CO₂ (g/km) | Rate (€/g) | Deduction |
|---|---|---|---|
| 1st | Up to 99 | €0.00 | €0.00 |
| 2nd | 100 – 115 | €35.26 | €3,490.74 |
| 3rd | 116 – 145 | €55.76 | €5,851.74 |
| 4th | 146 – 175 | €142.99 | €18,505.99 |
| 5th | 176 – 195 | €190.58 | €26,840.49 |
| 6th | Over 195 | €237.59 | €36,025.74 |
1.3 Age reduction (used vehicles)
| Vehicle age | ISV reduction |
|---|---|
| Less than 1 year | 10% |
| 1 to 2 years | 20% |
| 2 to 3 years | 28% |
| 3 to 4 years | 35% |
| 4 to 5 years | 43% |
| 5 to 6 years | 52% |
| 6 to 7 years | 60% |
| 7 to 8 years | 65% |
| 8 to 9 years | 70% |
| 9 to 10 years | 75% |
| Over 10 years | 80% |
2. What is IUC?
IUC (Imposto Único de Circulação) is an annual tax paid by all vehicle owners registered in Portugal. Unlike ISV, it renews every year until the registration anniversary month.
2.1 IUC Table - Cylinder component
| Engine (cc) | Annual value |
|---|---|
| Up to 1,000 | €11.27 |
| 1,001 – 1,300 | €26.56 |
| 1,301 – 1,750 | €54.22 |
| 1,751 – 2,600 | €131.59 |
| Over 2,600 | €237.44 |
2.2 IUC Table - CO₂ component
| CO₂ emissions (g/km) | Annual value |
|---|---|
| Up to 120 | €0.00 |
| 121 – 180 | €60.43 |
| 181 – 250 | €131.09 |
| Over 250 | €270.12 |
3. Electric and hybrid vehicles
4. Practical example
A petrol car with 1,600 cc and 130 g/km CO₂, 3 years old:
| Item | Value |
|---|---|
| ISV cylinder component (gross) | €3,801.00 |
| ISV CO₂ component (gross) | €1,397.06 |
| Age reduction (3 years = 35%) | - €1,819.92 |
| Final ISV | €3,378.14 |
| Annual IUC (cyl. + CO₂) | €114.65 |
| TOTAL 1st YEAR | €3,492.79 |
Use the Vehicle Tax Simulator for a personalised estimate.
5. How to reduce the tax impact?
Conclusion
Vehicle taxation in Portugal continues to penalise higher displacement and higher emissions, while incentivising the shift to electric mobility. Use the simulator to calculate the tax impact and make an informed decision.
Values and tables are estimates based on 2025/2026 fiscal tables. For definitive values, consult the Portuguese Tax Authority (AT).
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