Indirect Taxes

Value Added Tax (VAT)

Reduced rate

The following now benefit from the reduced VAT rate:

• operations involving the transformation of olives into olive oil; 
• game species, both big and small game; 
• sales of works of art by registered dealers, under the Special Scheme for the Taxation of Second-Hand Goods, Works of Art, Collectors’ Items and Antiques.

Exemptions

The scope of the VAT exemption applicable to the supply of tricycles, wheelchairs (with or without a motor), and passenger or mixed-use vehicles for the use of persons with disabilities is extended to also cover:

• public utility legal persons;
• non-profit sports associations and federations;
• private social solidarity institutions;
• cooperatives;
• associations of and for persons with disabilities.
   

The following exemptions are extended until 31 December 2026:

• fertilisers, soil improvers, soil correctives, and other products for feeding livestock, poultry, and other animals used in agricultural activities;
• dry or wet products intended for feeding companion animals sheltered by animal protection associations;
• food for companion animals purchased by animal welfare associations.

All these exemptions confer the right to deduction.

Excise Duties (IEC)

Excise duty on alcoholic beverages and on non-alcoholic beverages with added sugar (IABA)

The reduced IABA rate (applying only 25% of the tax) applicable to liqueurs and “crème de”, to distilled spirits and fruit spirits (in certain categories and with specific characteristics).  is extended until 31 December 2026, provided they are manufactured exclusively from strawberry tree fruit and produced and distilled in the municipalities already provided for in the legislation in force.

Tobacco tax

“Nicotine pouches” will be taxed under the tobacco tax at a rate of € 0.065/g.

Tax on petroleum and energy products

Update of the minimum and maximum limits of ISP unit rates to be applied in the Autonomous Region of the Azores, with reductions for products such as petrol and diesel.  

The level of taxation on natural gas used in Mainland Portugal to produce electricity, cogeneration or town gas, as a principal use, remains at 50% of the ISP rate and 50% of the surcharge on CO₂ emissions. 

The reduced‑taxation benefit on dyed diesel for vehicles used by forest firefighting teams integrated into the Integrated Rural Fire Management System is maintained.  

The benefit applicable to small artisanal and coastal fishers, small aquaculture operators and sea‑salt extraction companies is maintained, in the form of: 

subsidies on the number of litres of petrol consumed in their activity, equivalent to the reduction in the rate applicable to diesel consumed in fishing; and subsidies on liquefied petroleum gas (LPG) consumed in their activity, equivalent to the reduction in the rate applicable to diesel consumed in fishing. 

Additional to the single vehicle tax (IUC)

The additional to the single vehicle tax (Adicional ao IUC – Imposto Único de Circulação) remains in force. 

Vehicle Tax (ISV)

Passenger cars equipped with plug‑in hybrid engines, whose battery can be charged from the electricity grid and that have a minimum electric‑mode range of 50 km, is longer taxed under the standard regime and will instead be taxed at an intermediate rate of 25%, provided they have official emissions below 80 g CO₂/km when type‑approved under the “Euro 6e‑bis” emissions standard.