Tax benefits & incentives
Learn about the incentives that could influence the shift to electric mobility in 2023
Stay on top of car taxation
Taxes are a fact of life but we know that keeping up with taxation regulations isn't a hobby for everyone. On this page we breakdown how vehicles are taxed, the differences in taxes depending on the fuel type and the incentives on offer for low and zero CO2 emission vehicles.
Environmental Fund Incentive Program
In 2023, the Environmental Fund has an incentive program for the purchase and installation of electric vehicle chargers in condominiums, linked to Mobi.E - the management entity for electric mobility in Portugal. The incentive consists of the allocation of 80% of the purchase price of the charger, with VAT, up to € 800 per equipment, and another 80% of the value of the associated installation, with VAT, up to an amount of € 1000 per parking space.
For 24 months from approval, the Environmental Fund pays the Mobie.E network access tariff. That is, only after 2 years does the tariff become that of the contracted Electric Mobility Energy Supplier (CEME).
Income Tax (IRC)
Corporate income tax
- Plug-in hybrid passenger cars, which have a minimum range of 50 km in electric mode and official emissions of less than 50 gCO2/Km, see rates decrease by 2.5% compared to 2022.
- Passenger cars powered by CNG (vehicular natural gas) have more significant reductions compared to 2022: they are no longer taxed at the rates of LPG-powered vehicles. They are now taxed at the same rates as plug-in hybrids.
- 100% electric vehicles with an acquisition value of more than €62,500 will have a 10% rate, compared to the 2022 exemption.
Autonomous Taxation Rates
Acquisition Value | Passenger Cars | LPG | Plug-in hybrids and CNG | Electric vehicles |
|---|---|---|---|---|
< 27.500€ | 10% | 7,50% | 2,50% | 0% |
Between 27.500€ and 35.000€ | 27,50% | 15% | 7,50% | 0% |
Between 35.000€ and 62.500€ | 35% | 27,50% | 15% | 0% |
> 62.500€ | 35% | 27,50% | 15% | 10% |
VAT - Deduction of acquisition values and other charges:
Light passenger and mixed vehicles- VAT on the purchase price and lease rents is not deductible;
- Other charges do not deduct VAT, except fuel which has a 50% deduction if the vehicle is diesel, LPG or natural gas.
Light commercial goods vehicles- VAT on the purchase price and rental income is deductible;
- Other charges deduct VAT in full, except fuel which has a 50% deduction if the vehicle is diesel, LPG or natural gas (petrol does not deduct VAT).
Electric, plug-in hybrid, LPG and CNG vehicles- Deduction of 100% of VAT on energy used for electric mobility;
- It is also possible to deduct VAT for acquisition, operational leasing and transformation expenses with electric vehicles or plug-in hybrids, and 50% for vehicles powered by LPG or CNG, provided that the acquisition cost does not exceed the following limits:
100% electric vehicles with an acquisition value excluding VAT of up to €62,500 Plug-in hybrid vehicles with an acquisition value excluding VAT of up to €50,000 Vehicles powered by LPG or CNG with an acquisition value excluding VAT of up to €37,500
- Other charges such as maintenance, tires, repairs, among others, do not deduct VAT.
ISV
The ISV is a one-time tax levied on the first registration of a vehicle in Portugal and is paid according to the form of registration. This tax had an average increase of 4% in 2023.
% ISV reduction | 2023 |
|---|---|
<p>Passenger cars equipped with hybrid engines </p><p></p> | 0% |
Light commercial goods vehicles | 40% |
Electric, plug-in hybrid and LPG vehicles | 25% |
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