PortugalPolitics

Government is moving shortly with a reduction in autonomous taxation to 2027 and 2028

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Briefings

The Portuguese government announced a reduction of autonomous taxes on vehicles under the IRC and IRS, as part of a tripartite social agreement signed in October 2024. The first phase, effective January 2025, lowered vehicle tax rates by 0.5 percentage points across three price brackets, with purchase limits expanded. The second phase targeting 2027-2028 is pending parliamentary approval, with specific new rates and reductions still unknown.

Key points

• A tripartite agreement signed on October 1, 2024, mandates a 20% reduction in autonomous vehicle taxes by 2028, with the first phase implemented in 2025 and the second phase pending.
• The 2025 phase reduced vehicle tax rates by 0.5 percentage points across three price brackets, with purchase limits expanded to 37,500 euros for the first bracket.

Context

This fiscal adjustment follows a tripartite agreement signed in October 2024 between the government, employers, and UGT, aiming to reduce autonomous taxes on vehicles. The first phase was implemented in 2025, and the second phase targeting 2027-2028 is pending parliamentary approval.

Limitations

The specific new tax rates for 2027-2028 are not specified, and the exact reduction amounts for each price bracket in the second phase remain unknown.

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