Understanding Road Taxes for Imported Cars in Portugal

If you’re moving to Portugal and thinking of bringing your car with you, it’s important to understand the road taxes and regulations for imported vehicles. While the cost of living in Portugal may be affordable, car prices in the country can be high compared to other European countries. However, importing a car to Portugal requires careful consideration of taxes, documents, and eligibility criteria.

There are two main taxes you might need to pay when importing a car to Portugal: VAT (Value Added Tax) and ISV (tax on vehicles). Portuguese citizens who emigrated to another country for more than 6 months may be exempt from paying taxes on importing a vehicle.

EU residents will not have to pay VAT, but are subject to paying ISV, unless they are emigrating. Non-EU residents may also bring their car tax-free if they are emigrating. If they want to import outside of emigration, they will have to pay VAT as well as ISV. Additionally, everyone must pay the IUC (Imposto Único de Circulação), a tax for driving on Portuguese roads.

It’s important to meet the necessary documentation requirements for tax exemption, which include proof of living documents, car ownership, and cancellation of residency in your foreign country.

Shipping your car to Portugal is an option, and the cost can vary depending on the starting location. Overall, understanding the road taxes and regulations is essential for a smooth and legal importation process.

Topics:

• Importing a car to Portugal may require payment of VAT, ISV, and the yearly IUC tax.
• Portuguese citizens who have emigrated for more than 6 months may be exempt from taxes on importing a vehicle.
• Those who are emigrating are able to import their car without ISV and VAT.
• Non-EU residents may still need to pay VAT if they are not emigrating.
• Understanding yearly road taxes.

Key Takeaways:

• Save on import taxes by importing small cars, hybrids or work vehicles
• You can pay less IUC (road tax) on cars that were introduced to European roads before July of 2007.
• Diesel cars are quite favorable tax-wise, compared to many other European countries
• Import your car tax-free when immigrating to Portugal

Importing a car is quite a bureaucratic process, but it’s worth in in many cases.

We can help you with this. You are welcome to contact us if you have any questions about this.

Taxes for Importing a Car to Portugal

When importing a car to Portugal, it’s important to be aware of the taxes and duties that you may need to pay. Understanding the tax regulations can help you plan your budget and ensure a smooth importation process.

VAT (Value Added Tax)

VAT is a tax that applies to all new cars and some used cars imported to Portugal. The current VAT rate in mainland Portugal is 23%. This tax is calculated based on the car’s value, including shipping and insurance costs. VAT is applicable to both individuals and businesses importing vehicles. It’s important to include this tax in your budget when estimating the total cost of importing a car to Portugal.

ISV (Imposto sobre Veículos)

ISV is a tax specifically on vehicles that applies to all imported cars. The ISV rate varies depending on factors such as the car’s engine size, carbon dioxide emissions, and age. ISV depends on engine size, the age of the car and the type of vehicle. For example, certain types of work vehicles only pay 10% ISV. It’s important to calculate and prepare for this tax when importing a car to Portugal.

While VAT and ISV are the main taxes for importing a car, it’s important to note that there may be additional import duties and customs duties depending on the specific circumstances of the importation.

Eligibility for Tax Exemption

If you are moving to Portugal (or have moved in the past 12 months), you a likely eligible for tax-free import. To be eligible, you need to have your paperwork in order.

Portuguese citizens who have emigrated for more than 6 months may be exempt from paying VAT and ISV. Additionally, Portuguese residents who meet certain criteria, such as diplomats and members of international organizations, may also be eligible for tax exemption.

However, it’s important to consult with the relevant authorities and provide the necessary documentation to prove your eligibility for tax exemption.

Non-EU residents importing a car to Portugal may still need to pay VAT and other taxes and duties, depending on their residency status and the specific importation circumstances.

Documents for Tax Exemption

To be eligible for tax exemption when importing your car to Portugal, you will need to provide specific documents. These include:

• Proof of life for at least 6 months, such as rental payments or utility bills
• Documentation showing car ownership for at least 6 months
• Cancellation of previous residency

These documents are essential to prove your eligibility for tax exemption and must be submitted during the importation process. It’s important to gather all the necessary paperwork and ensure that it is valid and up to date before importing your car.

We can help you figure out if you are eligible for tax exemption.

You are welcome contact us if you need help with this.

Yearly Road Tax – IUC (Imposto Único de Circulação)

In addition to VAT and ISV, there is a yearly road tax that must be paid to drive on Portuguese roads. The IUC is calculated based on factors such as the car’s engine size, age, and emissions. The tax rates vary and are updated annually. It’s important to consider the cost of the IUC when budgeting for your imported car in Portugal.

Understanding the taxes and duties involved in importing a car to Portugal is crucial for a successful and compliant importation process. By being well-informed and prepared, you can navigate the tax regulations and ensure a smooth transition for your imported vehicle.

Before or after 2007

Cars that entered European roads before July of 2007 are in the old IUC regime. This means lower road taxes. 

Our small car would cost only 30-40 euros per year in the old regime but in the new one it would cost around 150 euros per year. This is something to keep in mind when shopping for a used car.

Process of Importing a Car to Portugal

Importing a car to Portugal involves several steps and processes that need to be followed carefully. Here is a step-by-step guide to help you navigate the car import process:

1. Register on the Portal das Financas: Begin by registering on the Portal das Financas, the online platform for the tax department in Portugal. Once registered, you will obtain a tax identification number, which will be required for the importation process.
2. Obtain the Certificate of Conformity: Ensure that you have the Certificate of Conformity for your car. This document is issued by the manufacturer and confirms that your car meets the legal requirements. It’s important to have this certificate homologated by the IMT (Instituto da Mobilidade e dos Transportes), which may take a few days.
3. Book a car inspection: Schedule a car inspection at an IMT-approved garage. This inspection ensures that your car meets safety and environmental regulations in Portugal.
4. Fill out the customs declaration form (DAV): Complete the customs declaration form, also known as DAV (Declaração Aduaneira de Veículos). This form provides important information about the vehicle, including its origin, value, and previous ownership.
5. Pay the required taxes: Calculate and pay the necessary taxes for importing your car. This includes VAT (Value Added Tax) and ISV (tax on vehicles) if applicable. Make sure to consult the tax authorities or a professional to determine the exact amount you need to pay based on your specific situation.

“Importing a car from outside the EU to Portugal may involve additional steps and requirements, such as customs clearance and compliance with import regulations. It’s important to consult the relevant authorities or seek professional advice to ensure a smooth importation process.”

Once all the necessary documents and taxes have been processed, you can proceed with the following steps:

6. Apply for your Portuguese car document: Apply for your Portuguese car document, also known as a “documento único automóvel” (DUA). This document serves as proof of registration and ownership of the vehicle in Portugal.
7. Pay the yearly IUC tax: Pay the yearly IUC (Imposto Único de Circulação) tax, which is required to drive your car on Portuguese roads. The IUC tax varies based on factors such as engine size, fuel type, and emissions.
8. Change your license plate: Change your license plate to a Portuguese one. This step involves visiting a vehicle registration office and following the necessary procedures.

Following these steps will help ensure a smooth importation process for your car in Portugal and allow you to legally drive on Portuguese roads.

Car Insurance in Portugal

When importing a car to Portugal, it’s important to remember that car insurance is mandatory for all vehicles, including imported cars. You must have valid car insurance to drive legally on Portuguese roads. Ensuring that you have the necessary coverage is essential to comply with Portuguese law and protect yourself from any potential financial risks.

The cost of car insurance in Portugal can vary based on several factors such as the engine size of the vehicle, its age, and the driver’s personal history. These factors play a significant role in determining the car insurance premium. Additionally, the type of coverage and the insurance provider also influence the overall cost of car insurance.

Typically, the price range for annual insurance coverage starts from €150 and can go up to €700 or more, depending on the aforementioned factors.

Our small car insurance costs about 30 euros per month.

It’s crucial to factor in the cost of car insurance when importing a vehicle to Portugal. This way, you can budget accordingly and ensure that you have the necessary financial resources to cover the insurance premium.

It’s important to shop around and compare quotes from different insurance providers to find the best coverage at a competitive price. This will allow you to choose an insurance policy that meets your needs and provides adequate protection for your imported car.

Understanding these factors and their impact on car insurance costs will help you make informed decisions when selecting a policy that suits your needs and budget.

Used Car Market in Portugal

The used car market in Portugal offers a diverse selection for those interested in importing a vehicle. In Portugal, car buyers often gravitate towards popular German brands like Volkswagen, BMW, and Audi. These brands are known for their reliability and high quality, which contributes to their ability to retain value and command higher prices in the used car market. French brands such as Renault are also popular.

There has been a notable increase in the popularity of electric and hybrid vehicles in Portugal in recent years. Diesel is also very popular, because it’s not taxed as heavily as in many other European countries.

SUVs are also a favored choice among car buyers in Portugal. The versatility and spaciousness offered by SUVs, coupled with their ability to retain value better than other vehicle types, make them a popular option.

When considering importing a used car to Portugal, it is crucial to conduct thorough market research and take into account factors such as brand popularity, fuel efficiency, and resale value.

Popular Car Brands in the Used Car Market

Here are some popular car brands in the used car market in Portugal:

• Volkswagen
• BMW
• Audi
• Renault
• Mercedes-Benz
• Peugeot
• Toyota
• Ford
• Nissan

Electric and Hybrid Vehicles in Portugal

Electric and hybrid vehicles have gained significant traction in Portugal. Here are some popular electric and hybrid models:

• Renault ZOE
• Nissan LEAF
• BMW i3
• Tesla Model S
• Hyundai Kona Electric
• Toyota Prius
• Mercedes-Benz EQC

SUVs in Portugal

SUVs are a common sight on Portuguese roads. Here are some popular SUV models:

• Volkswagen Tiguan
• BMW X3
• Audi Q5
• Nissan Qashqai
• Mercedes-Benz GLC
• Volvo XC60
• Toyota RAV4
• Ford Kuga
• Peugeot 3008

Driving Regulations in Portugal

When driving in Portugal, it’s important to familiarize yourself with the country’s traffic rules and regulations. Portugal follows right-hand traffic rules, which means that vehicles drive on the right side of the road. As a result, left-hand drive vehicles are the standard in the country.

If you are moving to Portugal from a country that also drives on the right side, such as the United States, you won’t need to make any adjustments to your driving practices. However, if you are transitioning from a country that drives on the left side, such as the United Kingdom, you will need to adjust to driving on the right side of the road.

It’s important to be mindful of the traffic rules and road signs in Portugal to ensure a safe and smooth driving experience. Familiarize yourself with the local traffic regulations, including speed limits, right-of-way rules, and parking restrictions.

Observe and follow all traffic signs and signals, including stop signs, yield signs, and pedestrian crossings. Be aware of the rules for overtaking, lane usage, and roundabout navigation.

If you are unsure about any specific traffic rules or regulations, it is recommended to consult the official website of the Portuguese traffic authorities or seek guidance from local authorities or driving instructors.

Key Points to Remember:

• Portugal follows right-hand traffic rules.
• Left-hand drive vehicles are the standard in Portugal.
• Drivers transitioning from a left-hand driving country should adjust to driving on the right side of the road.
• Observe and follow all local traffic rules and regulations, including speed limits and right-of-way rules.

Shipping Your Car to Portugal

If you’re moving to Portugal from outside of Europe and want to bring your car along, shipping it is a practical option to consider. The cost of shipping varies depending on your starting location. For example, shipping a car from the United States to Portugal can cost between €2,500 and €3,500, while shipping within Europe can be around €1,000.

When shipping your car, there are several factors to take into account. The size of your vehicle and the shipping method you choose will impact the overall cost. It’s important to research different shipping options and obtain quotes from reputable shipping companies to ensure you get the best price and service.

If you are already within Europe, another alternative to shipping is embarking on a road trip to Portugal. Not only can this be a cost-effective option, but it also allows you to enjoy the journey and explore different countries along the way.

Consider the pros and cons of shipping versus driving your car to Portugal based on your specific circumstances and preferences. Evaluate factors such as cost, convenience, timeline, and personal comfort to make an informed decision.

Pros of Shipping Your Car to Portugal

• Convenient for long distances or international moves
• Eliminates wear and tear on your vehicle from a long road trip
• Allows for the transportation of personal belongings in the vehicle
• Can be quicker than driving, especially for overseas shipments

Cons of Shipping Your Car to Portugal

• Higher cost compared to driving, especially for long distances
• Dependent on the reliability and reputation of the shipping company
• May require additional documentation and paperwork for customs clearance
• Limited control over the transportation process and timeline

Shipping your car to Portugal can be a convenient option, especially if you’re coming from outside of Europe. Consider the cost, distance, and personal preferences to decide whether shipping or driving your car is the best choice for you.

Conclusion

Importing a car to Portugal requires careful attention to road taxes, regulations, and the overall importation process. Understanding the taxes involved is crucial, with VAT, ISV, and the yearly IUC tax being the key components. However, there are exemptions available for Portuguese citizens who have lived abroad, as well as specific eligibility criteria for tax exemption. To successfully import your car, you must complete the necessary registration, gather and submit all required documents, undergo inspections, and ensure correct payment of taxes.

If you are moving to Portugal from outside of Europe, shipping your car is a viable option to consider. By exploring various shipping methods and calculating costs, you can make an informed decision based on your circumstances. Additionally, it is important to note that car insurance is mandatory in Portugal, and the cost can vary depending on factors such as the size and age of the vehicle. Familiarizing yourself with the used car market, driving regulations in Portugal, and available shipping options can further assist you in making the right choices when importing a car to Portugal.

To conclude, successfully navigating the road taxes and regulations for imported cars in Portugal is essential to ensure a legal importation process. By adhering to the guidelines, collecting the necessary documentation, accurately calculating taxes, and following each step of the process, you can ensure a seamless importation and drive legally on Portuguese roads.