Portugal changes IUC car tax payment calendar

The Portuguese government approved a reform of the Imposto Único de Circulação (IUC), the annual car circulation tax. The new regime replaces the current system, where the tax is due in the month of each vehicle’s registration, with a fixed payment calendar for all motorists.

A transitional year will run in 2027 to avoid double payments. During 2027, drivers with an IUC bill up to €500 will pay a single instalment in October; those with a bill above €500 may split the payment between July and October, or pay the whole amount in July. From 2028 the permanent schedule applies: IUC up to €100 is payable in April; €101‑€500 is split between April and October; amounts above €500 are paid in three instalments in April, July and October. Taxpayers may still choose to pay the full amount in a single instalment regardless of the tier.

The reform does not alter the tax rates but aims to simplify compliance, make deadlines more predictable, and reduce the large number of fines that result from missed payments under the previous month‑based system.