Following the vote and approval of the State Budget for 2025 in Portugal, the Portuguese Parliament approved a 0.5 percentage point reduction in autonomous taxation rates for Corporate Income Tax (CIT) purposes. This tax applies to expenses related to passenger and commercial vehicles, as defined in Article 7(1)(b) of the Vehicle Tax Code. Additionally, Parliament has increased the acquisition cost threshold used to determine autonomous taxation.
Tax changes
According to State Budget Law No. 45-A/2024, the acquisition cost thresholds have been raised by 10,000 euros compared to the previous Budget. The new thresholds are as follows:
Thresholds on autonomous taxation in Portugal
Implementation
For hybrid vehicles, the rates remain unchanged from the 2024 State Budget. However, these vehicles will benefit from the updated thresholds.
It is important to note that these changes will only affect the calculation of autonomous taxation for the 2025 financial year. This means the impact will affect in the CIT return due by May 2026. Therefore, the CIT return for the 2024 financial year, to be submitted by May 2025, should consider the provisions in force until 31 December 2024.
Withholding tax on passenger and commercial vehicles has been evolving. To ensure compliance with Portuguese tax obligations, you can rely on us for expert tax advisory and seamless tax compliance management. Portugal was our first subsidiary abroad, which gives us a deep understanding of the country.
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All information contained in this publication is up to date on 2024. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice.No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.