A new tax simplification measure in Portugal will compel an estimated 15,000 to 20,000 vehicle owners to pay a circulation tax twice within two months, sparking concern among industry groups.
The change shifts the annual Unique Circulation Tax (IUC) payment from a vehicle’s registration month to a mandatory February collection for all vehicles. These new rules are set to debut next year.
This transition means owners of cars registered in December will face payments in both December of the current year and the following February, when the new system takes effect.
Portuguese industry associations reported to local media that between 15,000 and 20,000 car owners will be affected by this double payment.
The new rules also present a significant burden for vehicle dealerships. They previously paid the tax on their stock vehicles throughout the year based on registration dates. They will now face a concentrated payment for all stock in February.
Portugal’s Finance Minister, Joaquim Miranda Sarmento, defended the policy. He stated the measure aims for fiscal simplification and helps prevent “involuntary forgetfulness” by taxpayers.