Portugal's ISV vehicle tax: rates, exemptions and hybrid incentives

Portugal’s Imposto Sobre Veículos (ISV) is a tax paid when a vehicle is first registered in the country. It applies to new vehicles and to used cars imported for registration. The amount is calculated primarily from the vehicle’s CO₂ emissions and engine displacement.

The tax covers passenger cars, mixed‑use vehicles, light commercial vehicles, motorhomes, motorcycles, tricycles and quadricycles. Exemptions include non‑motorised vehicles, 100 % electric vehicles, vehicles powered solely by renewable non‑combustible energy, and certain light commercial vehicles up to 3 500 kg without four‑wheel drive.

Plug‑in hybrid vehicles receive significant reductions: a 40 % cut for models with at least 50 km electric range and emissions under 50 g CO₂/km, a 75 % cut for qualifying hybrids, and a 25 % cut for hybrids imported from other EU states that were first registered between 1 Jan 2015 and 31 Dec 2020 and have at least a 25 km electric range. Additional exemptions are granted to people with disabilities, large families, new residents in Portugal, and diplomatic or consular staff, limited to one vehicle per beneficiary every ten years. Prospective buyers are advised to simulate the ISV cost before purchase to avoid unexpected expenses.