Tax breaks are a big deal for car owners. Some vehicles are exempt from paying the Unique Circulation Tax (IUC). This tax is like a yearly fee for driving a car. The Tax Authority recently clarified which vehicles don’t have to pay this tax.
Vehicles used for taxi services or rental cars with drivers are exempt, but only if they have a special “T” marking and meet certain emissions standards. This means they can’t emit more than 180 grams of CO₂ per kilometer (under the NEDC test) or 205 grams (under the WLTP test).
However, vehicles used for TVDE (transporte em veículo de duas ou mais rodas) don’t qualify for this exemption, even if they meet the emissions standards. This has sparked criticism from professionals in the industry, who think it’s unfair to treat TVDE vehicles differently.
Let’s take a look at which vehicles are exempt from paying the IUC:
- 100% electric vehicles: These are exempt to promote sustainable mobility.
- Historic vehicles over 30 years old: If they’re used occasionally (less than 500 km per year) and certified by competent authorities, they’re exempt.
- Vehicles for people with disabilities: Those with a disability rating of 60% or higher can benefit from an exemption, as long as the vehicle meets certain requirements.
- Taxis and rental cars with drivers (marked with a “T”): These are exempt if they meet emissions standards.
- Vehicles from social solidarity institutions: These institutions are exempt from paying the IUC for their vehicles.
- Ambulances, funeral vehicles, and agricultural tractors: These are exempt due to their specific functions.
- Vehicles from public entities and security forces: Vehicles belonging to the central, regional, or local administration, as well as military and security forces, are exempt.
- Abandoned or lost vehicles: Vehicles considered abandoned or declared lost in favor of the state are exempt.
- Vehicles from diplomatic missions and international organizations: Vehicles used by diplomatic missions, consular offices, or international organizations with representation in the country are also exempt.
The IUC is an annual tax that replaced the old “car sticker” tax. It’s not the same as the ISV, which is a one-time tax paid when a vehicle is first registered.
When you buy a new car, you typically pay the IUC at the time of purchase. If you import a vehicle, you need to pay the IUC within 30 days of registering the vehicle.
