Do you own a vehicle, a car, motorcycle or boat with foreign regisration that remains in Portugal for more than 183 days?

Find out if you are exempted or if you have the obligation to pay the vehicle property tax - IUC - an annual tax which is due each year.

If you own a recreational boat with a foreign flag, not registered in Portugal, and you entered with your boat into a Portuguese port or marina, remaining in the country, for example for three months counting from January and another 4 months counting from May, you have to pay the tax in Portugal. Even if you sailed into Spain or to another country, the law is clear: the IUC tax is due when the boat remains in the national territory for a period exceeding 183 days, consecutive or not, in each calendar year, for vehicles not subject to registration in Portugal. If this is the case, the tax is due up to 30 days after the 183 days of stay in national territory.

Even if the boat has a foreign flag register that doesn’t oblige you to pay taxes in that country, that is only valid for that country, and it doesn’t apply to Portugal in the circumstances mentioned above.

This happens to all vehicles with foreign register, except those that are exempted of that obligation, provided by law by the condition of the owner or the vehicle itself.

The current rate applicable to boats is €2,73 per kW, and for other vehicles, as cars, it’s calculated according to the engine CC and CO2 emissions and type of fuel.

It is important to determine the moment from which the tax department has the right to demand the payment of the tax. For cars, heavy vehicles, motorcycles, usually on the date of registration; for boats and aircrafts, the tax is due on January 1st of each year or when an engine is added or the power of the boat is increased, on the day that this change occurs. For vehicles imported after July 2007 from countries outside the EU/EEA, the registration date for IUC calculation is always the Portuguese registration date.

However, our tax law foresees several situations for exemption, namely for vehicles considered special and recreational boats for private and non-commercial use with engine power under 20 kW. All others with power over 20 kW registered since 1986 are subject to the payment of IUC.

However, there are exemptions on vehicles which, although they remain in national territory for more than 183 days, are registered in another member state and meet the requirements to benefit from the temporary admission regime, in situations of execution of a mission of limited duration, internship or study, people with disabilities equal to or greater than 60%, Private Institutions of Social Solidarity, cross-border workers living in Spain for travel between their residence and place of work.

Also benefiting from the exemption are vehicles for rental service with driver and cabs, classic cars and motorcycles 20 years old, with occasional use, vehicles exclusively electric with register after June 2007, or powered by non-fuel renewable energy, ambulances, funeral vehicles and agricultural tractors, vehicles belonging to humanitarian fire departments, embassies or consulates, vehicles of forest firefighting teams and military and security forces.

Should you experience any problems or difficulties in this matter, we would recommend you seek the services and advice of a Solicitor who will guide you through the process.