The Imposto Único de Circulação (Single Road Tax) (IUC) is, for many vehicle owners, the annual reminder that the freedom of movement is a blessing… subject to taxation.
Automobiles, motorcycles, recreational boats or even private aircraft — if they have a Portuguese registration (or if they remain for a period exceeding 183 days, consecutive or not, in national territory), there is an associated tax obligation, whose revenue aims to offset environmental impacts and the wear on infrastructure caused by vehicle circulation.
However, with the Agenda para a Simplificação Fiscal (Tax Simplification Agenda), it was decided to profoundly change, in 2026, the payment calendar for the IUC, creating a kind of national “single queue” that promises to simplify administrative life — although it may complicate taxpayers’ cash flow in February.
What really changes in 2026: the new calendar
For years, IUC was paid in the month of the vehicle’s registration. Simple, straightforward, and with an almost celebratory logic: the car had a birthday, the taxpayer paid.
As of 2026, the model becomes completely different:
General regime (from 2026 onwards):
IUC up to €100.00 → mandatory payment in February
IUC over €100.00 → possibility of payment in two instalments:
1st instalment: February
2nd instalment: October
In practical terms, the registration date criterion will no longer apply. This change aims at administrative simplification in taxpayers’ lives, promoting greater tax predictability and reducing forgotten IUC payments, while avoiding the concentration of car-related expenses — such as insurance, inspection, and IUC — in a single month.
The goal is to make IUC assessment and collection more efficient, benefiting both individuals and companies.
Double payment in one quarter? The legal safeguard in the transitional rule
A doubt arose immediately: those who pay IUC in November or December 2025 will have to pay again in February 2026?
The Government stated that they will not.
In principle, there will be a norma transitória (transitional provision) preventing this burden and ensuring the taxpayer does not pay twice within a two- or three-month period. This rule is still awaiting final publication, but the legislative intent is clear.
February under pressure: IUC and tax management
Concentrating payment in February raises challenges:
-
Families with several vehicles may face a significant financial effort in a single month.
-
Companies with fleets must reorganize their cash flow and incorporate February as a critical month in their tax planning.
For this reason, it is highly advisable for individuals and companies to carry out careful and early financial planning, incorporating all expected tax charges to avoid liquidity strains in February.
Stability of rates — (finally) good news
Contrary to widespread concern, the Ministry of Finance has ensured that there will be no exceptional increase in IUC in 2026 (which, in Portugal, is almost cause for… moderate celebration).
Two steps ahead of the tax: IUC-exempt vehicles
If you want to benefit from IUC exemption, now is the ideal time to plan strategically.
Fully electric cars are exempt from IUC, but the list does not end there: there is an extensive list of exemptions, including:
-
Veículos históricos (historic vehicles) over 30 years old with limited use
-
Vehicles of persons with disabilities ≥ 60%, according to applicable categories
-
Vehicles of forest firefighters, regular firefighters, security forces and public administration
-
Ambulances, agricultural tractors and funeral vehicles
The list is extensive but clear: the legislator distinguishes environmental, social and public-interest purposes.
Electric vehicles continue to be the maximum expression of automotive tax benefit, being fully exempt from IUC. Companies and individuals considering replacing vehicles should view this exemption as a strategic element of tax planning.
As for plug-in hybrid vehicles, they remain subject to tax payment; however, the amount is lower than that applied to combustion vehicles, as they have lower CO₂ emissions.
This is an opportune moment to make informed decisions and ensure maximum tax efficiency — planning ahead now may bring significant advantages in the future.
A reflection: IUC has changed — and taxpayers’ approach must also change
The legislative change to IUC is not just a shift in dates: it is a structural redesign that should influence taxpayer behaviour.
The rule is simple, but the impact may be significant, requiring individuals and companies to carefully plan their cash flow to avoid financial strain and ensure timely compliance with tax obligations.
On the other hand, maintaining exemptions for electric vehicles and other specific categories reinforces the need for strategic planning.
In summary, understanding the rules and anticipating payments allows individuals and companies to avoid surprises, optimise liquidity and ensure predictable and efficient tax management, turning IUC from a mere annual burden into a controllable component of their financial planning.
The content of this information does not constitute any specific legal advice; the latter can only be given when faced with a specific case. Please contact us for any further clarification or information deemed necessary in what concerns the application of the law.