The Portuguese Tax and Customs Authority (Autoridade Tributária e Aduaneira) has issued guidance following growing confusion among motorists over planned reforms to the annual vehicle tax.

While a new payment schedule has been approved, it will not take effect until 2027.

For now, drivers must continue to pay their IUC by the final day of the month in which their vehicle was first registered.

Payment deadline

According to the tax authority, owners should continue to follow the existing timetable this year, with the payment deadline remaining tied to the vehicle’s registration month, meaning the tax must be settled before the end of that month.

Where the final day falls on the weekend or a public holiday, the deadline moves to the next working day. For example, vehicles with a May registration date have until 1 June to pay, as 31 May falls on a Sunday in 2026.

Why are drivers confused?

Much of the uncertainty stems from the fact that reforms to the IUC system have already been approved and widely reported.

However, although the new framework has been confirmed, it does not come into force until 2027. Until then, taxpayers must continue to generate their payment documents through the Finance Portal and pay the tax according to their vehicle’s registration month.

This future system will introduce fixed annual payment dates, replacing the existing registration-based schedule.

Transitional arrangements

Next year will serve as a transition period before the permanent model is introduced.

Under the transitional rules, vehicle tax of €500 or less will be paid in a single instalment during October, while tax exceeding €500 will be split into two instalments, payable in July and October, and motorists liable for more than €500 will also have the option of paying the full amount in July instead of using the instalment system.

These temporary arrangements are designed to bridge the gap between the old and new systems.

Permanent system

From 2028 onwards, a new fixed payment calendar will apply.

Under the permanent framework, an IUC of up to €100 must be paid by the end of April, while amounts above €100 and up to €500 will be divided into two payments, due in April and October, and tax liabilities exceeding €500 will be paid in three instalments, due in April, July and October.

This reform will standardise payment dates across all vehicle owners, removing the need to track individual registration months.

Fiscal neutrality

The government says the transitional arrangements have been introduced to prevent some motorists from effectively facing two IUC payments within a short period.

Because the current system is linked to registration anniversaries while the new model uses fixed annual dates, some taxpayers could otherwise have been required to make payments unusually close together.

Officials argue that the transition ensures fiscal neutrality while providing a smoother shift to the new framework.

The legislation also allows taxpayers to request cancellation of a 2027 IUC assessment in certain circumstances, such as when a vehicle's registration is cancelled before its anniversary date.

Missed instalments

The new rules will also include stricter consequences for late payment.

Motorists who fail to pay an instalment by the deadline will lose the benefit of spreading the cost. Any remaining balance will become immediately due, allowing the authorities to pursue the outstanding amount in full.

This provision will become particularly significant once the instalment-based payment system is introduced from 2027 onwards.