IUC: New Payment Changes Come into Effect in 2026

Author:

Carlos Jesus | Customer Success Specialist

The Single Road Tax (IUC) will be changing starting in 2026. Until now, vehicle owners subject to IUC had to pay this tax in the month of their vehicle's license registration. Starting next year, there will be a single payment date for all taxpayers, with payment now being made in February of each year. This change is part of a tax simplification measure and introduces new rules that all drivers should be aware of to avoid heavy fines.

But while for some the IUC is second nature, not all residents in Portugal may be aware of the need to pay this tax or even understand what the Single Road Tax actually is.

For that reason, this guide was developed to explain to you what IUC is, how it works, the costs, and what changes.

The Single Road Tax (IUC) is an annual tax applicable to any light passenger vehicles, light mixed-use vehicles, goods and mixed-use vehicles, motorcycles, mopeds, tricycles, quadricycles, recreational boats, and private aircraft registered in Portugal. Owners of these assets, or any individuals or legal entities registered as owners, are liable for this tax. Financial lessees and purchasers retaining title are also regarded as owners and are subject to the IUC.

The Single Road tax also applies to the type of vehicles referred to in the previous paragraph, which, although not subject to registration in Portugal, remain here for a period exceeding 183 days, consecutive or interpolated, in each calendar year, except for light-duty goods vehicles with a gross weight equal to or greater than 12 tonnes.

The tax base, as a rule, is based on engine displacement, voltage, age, and fuel. A substantial portion of IUC revenue accrues to the municipalities where the taxpayer resides.

The legal framework that regulates the IUC (Single Road Tax) is Law No. 22-A/2007, of 29 July. Its most recent updates were introduced by Law No. 45-A/2024, of 31 December.

When and How Is It Collected?

The Tax and Customs Authority is responsible for collecting the tax, considering, for all legal purposes, the tax act performed at the tax office of the taxpayer's residence or registered office. Tax collection is made by the taxpayer online, subject to the conditions of registration and access to electronic declarations.



At the time of tax collection, a single collection document is issued, which, certified by the means used in the collection network, proves proper payment of the tax.

No payment is due, nor is there any charge, if the amount of tax paid is less than €10.

In the year in which the vehicle is registered in the national territory, the tax needs to be settled by the taxpayer within 30 days after the end of the legally required period for the respective registration. In subsequent years, the tax must be collected by the end of the month in which it becomes due.

What Exactly Changes in 2026?

One of the main changes is the end of payment in the month of registration, which will be replaced by a fixed schedule that's easier to manage for all drivers. Starting 1 January 2026, payments will be due by the end of February, regardless of the month the vehicle was registered. This change applies to all vehicles subject to the IUC, whether new or used.

But there's more. If the tax amount exceeds €100, taxpayers can choose to pay the amount in two instalments. The first half must be paid by the end of February and the second by the end of October. However, those who prefer can continue to pay in full in February.

This change provides more predictability, helping to avoid forgetfulness and potential penalties. Until now, as payment was tied to the vehicle's license plate month, it was sometimes difficult to remember, especially for vehicles whose license plates no longer indicate the month and year of registration.

It's important to emphasise that these new rules do not change existing payment methods. The IUC can continue to be paid through the Tax Authority's Portal or in person at Tax Authority offices, CTT (Postal Service), or authorised banking institutions. The Single Vehicle Document (Documento Único Automóvel) remains required for this purpose.

Electric vehicles, in turn, remain exempt from IUC payment as an incentive for sustainable mobility.

This measure is part of a broader tax simplification package and aims to make taxpayers' lives simpler, with clear and standardised deadlines.

In short:

• The IUC payment deadline is now fixed: until 28 February.
• For amounts over €100, you can pay in two instalments: February and October.
• The usual payment methods (online or in person) remain.
• Electric vehicles remain exempt.
• The month of registration no longer influences the tax schedule.

1. Car with €90 IUC - one-time payment by the end of February.
2. Car with €150 IUC - one-time payment of €75 in February and €75 in October.
3. Motorcycle with €40 IUC - one-time payment by February.

Missing the IUC deadline can be costly. Failure to pay the IUC (Tax on Vehicles) within the deadline may result in a fine of 15% to 50% of the outstanding amount, with a minimum of €50 (or €25 if paid voluntarily after the deadline). In addition to the fines, daily interest and costs may be applied in the event of coercive collection.

Furthermore, unpaid taxes prevent the mandatory inspection from being carried out and, if continued non-compliance occurs, may lead to the immobilisation or impoundment of the vehicle.

To avoid any surprises, it's best to schedule a reminder with the payment deadline to fulfil this obligation, which in 2026 will be 28 February. If you have a vehicle registered in your name, mark this date on your calendar.

Conclusion

The IUC (Single Road Tax) will undergo changes starting in 2026. The goal of this reform is to simplify tax collection for both taxpayers and the Portuguese Tax Authority. From then on, the payment schedule will be unified, applying equally to all taxpayers, and it will remain unchanged even if a new vehicle is purchased.



In addition, certain exemptions from IUC may apply. If you believe you might qualify, it is advisable to review the criteria on the Tax Portal or consult your local tax office.

Have questions about your IUC or other taxes? Our team are ready to help you.