IUC: How the Single Circulation Tax Is Calculated

Born in 2007 - specifically on 1 July 2007 - the Single Circulation Tax (IUC) replaced three separate taxes at once: the Municipal Vehicle Tax (the well-known “Stamp”), the Circulation Tax and the Haulage Tax.

Its purpose is straightforward: it serves as compensation both for the wear vehicles cause to infrastructure and for their environmental cost. It is charged directly on vehicle ownership and ceases to be due only when the registration is cancelled.

The IUC is compulsory for a range of vehicles, from cars and motorcycles to recreational boats and even privately used aircraft. As far as cars are concerned, only fully electric models are currently exempt from the well-known IUC. This is because engine capacity and emissions, both of which are absent in electric cars, are among the factors used to calculate the tax.

IUC categories

There are seven categories in total, from A to G. For passenger cars, however, only the first two are relevant: categories A and B.

Category A covers passenger cars first registered in Portugal, a European Union country or the European Economic Area between 1981 and the date on which the IUC came into force - up to and including 30 June 2007.

Category B, meanwhile, includes all passenger cars whose first registration date in Portugal or another European Union Member State or European Economic Area country was after the IUC came into effect. In other words, it applies to every car registered from 1 July 2007 onwards.

How is the IUC calculated?

The IUC is worked out using the tax rates published each year in the State Budget, which vary according to the vehicle category.

For category A cars, the calculation is based on the fuel type, engine capacity and registration year, split into bands. For vehicles in category B, the formula takes account of fuel type, registration year, engine capacity and CO₂ emissions, also by band.

Calculating the IUC

To work out the IUC payable, you need to consult the rates for the relevant category and determine which ones apply. For a category B car, this also means identifying its engine-capacity and CO₂ bands. The following table sets out the rates for category B cars:

Engine capacity band (cm³)	Rates	CO₂ band NEDC	CO₂ band (g/km) WLTP	Rate
Up to 1250	29,39 €	Up to 120 g/km	Up to 140 g/km	60,28 €
More than 1250 up to 1750	58,97 €	More than 140 up to 180 g/km	More than 120 up to 205 g/km	90,33 €
More than 1750 up to 2500	117,82 €	More than 180 up to 250 g/km	More than 205 up to 260 g/km	196,18 €
More than 2500	403,23 €	More than 250 g/km	More than 260 g/km	336,07 €

Diesel-powered cars are also subject to an extra charge. Introduced in 2014, it depends on the vehicle's engine capacity.

Engine capacity (cm³)	Additional rate
Up to 1250	5,02 €
More than 1250 up to 1750	10,07 €
More than 1750 up to 2500	20,12 €
More than 2500	68,85 €

Cars registered after 1 January 2017 are subject to a further additional charge based on CO₂ emissions.

CO₂ band (g/km) NEDC	CO2 band (g/km) WLTP	Rates (euros)
More than 180 up to 250	More than 205 up to 260	29,39
More than 250	More than 260	58,97

Finally, the table below shows the coefficient linked to the date of first registration:

Year of acquisition	Coefficient
2007	1
2008	1,05
2009	1,1
2010 and subsequent years	1,15

The calculation can then be completed. Add the rate for the engine-capacity band to that for the emissions band, together with the additional charge for vehicles emitting more than 180 g/km and registered after 1 January 2017 where applicable. Multiply this amount by the coefficient for the year of acquisition, then add the extra charge for Diesel engines if it applies.

If this all sounds complicated, there is a slightly simpler option. As you would expect today, an online calculator can instantly determine how much you need to pay: impostosobreveiculos.info.

When is it paid and what happens if it is not?

As a rule, the IUC must be paid by the end of the month in which the registration shown on the vehicle registration document (DUA) falls. The exception is the first IUC payment after buying a new car or an imported used vehicle. In that situation, you have 30 days after the registration deadline to pay the IUC.

What happens if you do not pay?

If a car owner fails to pay the IUC, the vehicle and its registration documents may be seized or immobilised. This remains the case until the tax, the fines resulting from non-payment, and the costs of removing and storing the car have all been settled.

Are there any exemptions?

Put simply: yes, there are. The IUC code exempts taxis, classic cars and fire service vehicles from payment. Owners with a disability rating of 60% or more are also exempt, as are cases where the amount due is less than 10 euros.

Sources: impostosobreveiculos.info; E-Konomista.