Do you have to pay tax on your foreign vehicle?

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Do you own a vehicle, car, motorbike or boat registered abroad that stays in Portugal for more than 183 days?

Find out if you are exempt or if you have the obligation to pay the property tax on vehicles – IUC – an annual tax which is due each year.

If you own a pleasure boat flying a foreign flag, not registered in Portugal, and you have entered a Portuguese port or marina with your boat, remaining in the country, for example for three months from January and another 4 months from May, you have to pay the tax in Portugal. Even if you sailed in Spain or another country, the law is clear: the IUC tax is due when the boat remains in national territory for a period of more than 183 days, consecutive or not, during 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 the national territory.

Even if the boat has a foreign flag registry that does not require you to pay taxes in that country, this is only valid for that country and does not apply in Portugal under the circumstances mentioned above.

This happens to all vehicles registered abroad, except those which are exempt from this obligation, provided by law by the condition of the owner or the vehicle itself.

The current rate for boats is €2.73 per kW, and for other vehicles, such as cars, it is calculated based on the engine’s CC and CO2 emissions and fuel type.

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

However, our tax legislation provides for several exemption situations, in particular for vehicles considered as special and recreational boats for private and non-commercial use with a motor power of less than 20 kW. All others with a power greater than 20 kW registered since 1986 are subject to payment of the IUC.

However, there are derogations for vehicles which, although they remain on national territory for more than 183 days, are registered in another Member State and fulfill the conditions to benefit from the temporary admission regime, in situations of carrying out a mission of limited duration, internship or studies, disabled people equal to or greater than 60%, Private Institutions of Social Solidarity, cross-border workers residing in Spain for travel between their residence and their place of work.

Also benefiting from the exemption are vehicles for the rental service with driver and taxis, old cars and motorbikes that are 20 years old, for occasional use, exclusively electric vehicles registered after June 2007, or powered by renewable energies without fuel, ambulances, funeral vehicles and agricultural tractors, vehicles of humanitarian firefighters, embassies or consulates, vehicles of forest fire fighting teams and military and security forces.

If you encounter any problems or difficulties in this regard, we recommend that you seek the services and advice of a lawyer who will guide you through the process.

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