Mobility
Tax refund of the IUC (Single Circulation Tax)

Taxpayers can now complain to the Finance tax refund of the IUC (Single Circulation Tax) on Imported Vehicles.

  1. What has changed in the IUC settlement of imported vehicles?

Until 31 December 2019, the IUC Code provided that, for the purposes of determining the applicable taxation, only the date of the first registration issued in Portugal would be considered. 

 

Law No 119/2019 of 18 September revised that Code in order to - from 1 January 2020 – the date of the first registration issued in any Member State of the European Union or the European Economic Area. 

 

Thus, from January 1st 2020 vehicles previously taxed in Category B of the IUC, which were registered in Portugal on or after 1 July 2007 and which have been first registered in a country of the European Union or the European Economic Area prior to that date, were taxed in category A of that tax, which generally translates into a reduction in the tax due. 

 

  1. The decision of litigation relating to the past

Although that law only changed taxation for the future (in that case, as of 1 January 2020), with a view to reducing litigation with taxpayers and in view of the general duty of the Tax Administration to adapt its understanding to the case-law of courts, the Tax and Customs Authority (AT) decided not to proceed with the litigation in this matter in relation to the settlements prior to the entry into force of that law, forming its understanding to the case-law of the Court of Justice of the European Union European. 

In this context, the following guidelines have been issued to the AT services: 

  • Grant any graceful complaints, hierarchical appeals or unofficial revisions for settlements of IUC, of imported vehicles, on which the AT considered the date of assignment of registration in national territory and not the date of the allocation of registration in another Member State of the European Union or the European Economic Area;
  • Revoke the tax act pursuant to Article 112 of the Code of Procedure and Tax Procedure, if the judicial process is at that stage or proceeds to the unofficial review of the IUC settlement acts mentioned in the preceding paragraph, which has been subject to judicial challenge proceedings and the period referred to in Article 111(1) of the CPPT has already elapsed; And
  • not bring a judicial action in judicial proceedings decided unfavourably at first instance.



  1. Implementation of changes in the registration and intervention of the taxpayer

Car taxation is based on the data of vehicles that are registered in the Customs Declaration of Vehicles when they are introduced into consumption in Portugal, without prejudice to any subsequent changes. The use of this data is shared between the AT and the IMT - Institute of Mobility and Transport, as well as other entities. 

 

Until the entry into force of Law No 119/2019 of 18 September, the date of first enrolment in an EU Member State or the European Economic Area was not considered a relevant data for the purposes of taxation or for the purposes of vehicle identification and therefore did not appear in any of the structured data fields of that declaration. 

 

Nevertheless, from 1 January 2018, that declaration now includes the date of final registration in the country of origin, allowing the updating of the register based on this information when the vehicle is directly sourced from an EU Member State European economic area, reflecting this information in taxation at IUC. Additional changes are being made to make the Vehicle Customs Declaration specifically identify the date of the first enrolment in an EU member state or the European Economic Area. On the basis of this amendment, TA and IMT will now have this information in relation to vehicles imported or admitted to Portugal since that date. 

 

For vehicles imported between 1 July 2007 and 1 January 2018, for the purposes of applying the aforementioned amendment to the IUC Code, The TA is developing the changes necessary to make it - at the time of the liquidation of the IUC - the taxpayer date of the first enrolment in an EU member state or the European Economic Area. This information, subject to verification by the AT, will be included in the registration of the vehicle for all legal purposes, namely refund of taxes due in the legal terms. 

 

In summary:  

Which vehicles are covered by the amendment? 

This change in IUC applies to:

  • passenger cars (cars with a gross weight of up to 3500 kg and not exceeding nine seats, including that of the driver, intended for the transport of persons);
  • passenger cars over 3500 kg and not exceeding nine seats, including that of the driver;
  • mixed-use cars with a gross weight of not more than 2 500 kg,
  • whenever
  • have been imported or admitted to Portugal on or after 1 July 2007; And
  • first registration in a Member State of the European Union or the European Economic Area before 1 July 2007.

  

How is TA handling litigation in this matter? 

In relation to taxpayers who have requested or will request a review of their situation, either through administrative means (graceful complaint, hierarchical appeal or unofficial review), or by judicial means, the TA considered conforming to the interpretation of the Court of Justice of the European Union that those vehicles should be taxed in category A of the IUC. 

  

What should taxpayers do to update the vehicle registration and be applied to the new understanding? 

- For vehicles imported from 1 January 2018 from an EU Member State or the European Economic Area and which have only had a previous registration, with the AT having the necessary information there will be no need to update the vehicle registration; 

- For vehicles imported between 1 July 2007 and 1 January 2018, at the time of settlement of the IUC the taxpayer must confirm the date of first registration in the European Union or the European Economic Area. 

 

For this confirmation of the date of first registration in the European Union or the European Economic Area, a specific feature will be made available on the Finance Portal at the time of settlement. 

Until this functionality is made available, taxpayers can send this information to the AT through the finance website (available in https://www.portaldasfinancas.gov.pt/pt/formularioContacto.action) or the Finance Services, which will update the vehicle registration for all legal purposes.  

At “e-balcão”, taxpayers should choose the "Register new question" option and, on the next page, under "Tax or area" choose "IMT/IS/IUC", under "Question type" choose "IUC" and in "Question" choose "Other". In the "Subject" field it is recommended that they indicate "Date of first EU registration" for better identification of the issue. 

 

Source Portal das finanças 

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