Portugal reimburses IUC

The year 2020 is starting strong for the Portuguese governmentIn fact, the tax administration has reluctantly decided to reform the calculation of the IUC (imposto unico de circulação) for vehicles imported by Portuguese citizens or foreigners.

For many years, the Portuguese tax authorities have considered imported vehicles as new cars. In practice, this means that they deliberately failed to take into account the fact that these vehicles had already been registered in another European country, and were therefore no longer new cars but used ones.

Today the Portuguese tax authorities acknowledge their mistake, even that their way of proceeding was "limited". Better still, they recognize that the owners are entitled to recover the overpayment of the last 4 years.

Portugal condemned by the European Court

This rectification of the way the IUC is calculated follows a condemnation by the European Court in 2018. The European Court found that Portugal applied differential treatment to imported cars for the sole purpose of promoting the sale of new or used vehicles on the national territory.

Unfortunately, the Finance Department has carefully limited the refund of IUC overpayments to vehicles registered abroad for the first time before July 2007 and imported into Portugal after July 2007.