Anyone who imported a used car from the European Union in recent years may have paid more tax than they owed and, in some cases, may be entitled to a refund. The issue originates from the way Vehicle Tax (ISV) was calculated for imported used vehicles, an issue that has been analyzed by the Court of Justice of the European Union (CJEU).
The CJEU has already ruled on the matter, recalling that taxation cannot result in unfavorable treatment of imported vehicles compared to similar used vehicles already present on the national market.
In particular, the Court indicated that it is contrary to article 110 of the Treaty on the Functioning of the European Union to apply different reductions to the environmental component of the ISV compared to the cylinder component if, and to the extent that, this leads to the tax charged on the imported vehicle exceeding the “residual” tax incorporated in the value of similar national vehicles.
It is also important to note that, as of January 1, 2025, the regime began to provide for the application of the same percentage of reduction for “time of use” to the cylinder capacity and environmental components, which tends to reduce situations of inequality in the calculation for new imports made since that date.
Why ISV may be inappropriate in certain cases
The problem has been identified for several years and is linked to the principle of article 110 of the Treaty on European Union: an internal tax cannot, in practice, penalize imported products for the benefit of national ones.
In the Portuguese case, the risk arises when the calculation of the ISV for a used car coming from another Member State does not reflect, in the two components of the tax, a devaluation equivalent to that which exists in a similar used vehicle already registered in Portugal. It is this difference, when it exists and is demonstrable, that can support a request for refund of the excess amount paid.
Who can request a refund
In practical terms, the most common cases are those of taxpayers who imported a used car from the EU and paid ISV in years in which the reduction applied to the environmental component was lower than that applied to the engine capacity component (situations often mentioned for imports between 2021 and 2024).
Furthermore, there are deadlines to respect. As a rule, there is the possibility of reacting administratively within certain deadlines (for example, a graceful complaint within the legal deadline), and there may also be a framework for reviewing the tax act over a longer horizon under certain conditions.
What documents are typically required
To proceed with the request, it is common to need elements that allow you to identify the settlement and what was paid, such as:
- copy of the ISV settlement act/settlement note and proof of payment;
- vehicle documentation (including registration elements in the country of origin and data relevant to the calculation);
- invoice/purchase contract and import/legalization documents that support the situation.
Where and how to submit the application
The request can be submitted through the Finance Portal, in the e‑balcão service, in the area related to the Customs/Vehicle Tax component.
In the text, you must identify the settlement (number/date), explain that you believe there has been an excess charge and request a review and refund of the difference, invoking the framework of article 110 of the TFEU and the applicable CJEU case law.
Once submitted, the process awaits a response from .
What to do if the Tax Authority refuses
If the request is rejected, the next reaction depends on the means used and the moment in which the taxpayer acts. There are administrative routes and, in certain cases, it is possible to appeal to court (judicial challenge) within the deadlines set out in the tax procedural law.
How much could be at stake
Values vary case by case. In some situations, an amount of a few hundred euros may be at stake; in other cases, it may be higher. The central point is this: if it is demonstrated that the ISV charged exceeds what would be permissible in light of the applicable European rules, the difference may be refunded, within the legally established terms and deadlines.
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