Article

Law 82-D/2014 of 31 December reforms environmental taxation, changing a large set of regulations Decree Law 42-A/2016 of 12 August Dispatch 3169/2020 of 10 March Order 2535/2021 of 5 March Dispatch 5126/2023 of 3 May

Description

This law is part of environmental taxation reform in Portugal and establishing a set of green fiscal rules in the sectors of energy and emissions, transport, water, waste, land use, forests and biodiversity. This law provides a set of tax reductions for sectors including low emissions vehicles (Law 82-D/2014 of 31 December). 

The Dispatch 5126/2023 of 3 May continues the incentive to decarbonise individual mobility, started in 2017 (Decree Law 42-A/2016 of 12 August) amended the previous conditions for the companys' incentives.

In 2023, the Portuguese Government’s Environmental Fund has allocated €10,000.000 to incentive Electric Vehicles (Dispatch 5126/2023 of 3 May). For the companies the incentives are:

• €6,000 for the purchase of an electric light goods vehicle (in 2020 the amount was €2,000), limited to 2 vehicles per candidate;
• 50% of the purchase value price (up to a maximum of 1500€) for the purchase of an electric freight bicycle, limited to four per candidate;
• 50% of the purchase value price (up to a maximum of 500€) for the purchase of a fully electric bicycle, moped or motorcycle, limited to 4 per candidate.
• 20% of the purchase value price (up to a maximum of 100€) for the purchase of a conventional city bike.

Companies that invest in green energy vehicles benefit from some of the following tax incentives:

• Corporate tax deduction for company fleets with EVs (if value price not exceed €62,500).
• BEVs with a purchase value price up to €62,500 are exempt from autonomous corporate income tax. The BEVs that exceed this amount (€62,500), began to be taxed autonomously at a rate of 10%, since 1 January 2023.
• BEVs are exempt from Circulation Tax (Imposto Único de Circulação)
• Plug-in hybrid vehicles are eligible for reduced autonomous corporate income tax, that varies between 2.5% (for vehicles with a purchase price below €27,500) and 15% (for vehicles with a purchase price below €35,000).

Commentary

According to the Association of the Eletric Vehicles' Users (UVE - Associação de Utilizadores de Veículos Elétricos), in 2023, the market share of electric vehicles is still growing significantly, mainly due to the “green incentive” update, which translates into several financial advantages for companies (and for individuals).

In July 2023, Plug-in Hybrids Eletric Vehicle (PHEV) and electric vehicles (BEV) represented 32.6% of light passenger vehicle sales.

Considering all categories of vehicles sold in Portugal (light and heavy, passenger and goods), the purchase of eletric vehicles increase 100.7% growth, between June 2022 and June 2023.

In July 2023, PHEV had a market share of 15.6%. BEV already represent 17% of sales. The share of petrol vehicles has fallen to 35.2%, between 2020 and 2023. Diesel vehicles sales decrease and represents 10.7% of the sales.

Additional metadata

Cost covered by

Companies National government

Involved actors other than national government

Employer organisation Regional/local government

Involvement (others)

None

Thresholds

Affected employees: No, applicable in all circumstances
Company size: No, applicable in all circumstances
Additional information: No, applicable in all circumstances

Sources

• Law 82 D/2014 of 31 December
• Green taxation reform
• Law No. 82 D/2014 (in Portuguese)
• UVE - Associação de Utilizadores de Veículos Elétricos
• Order 2535/2021 of 5 March
• Veículos Elétricos - Vendas 2020-2023
• ACP - Automóvel Club de Portugal
• Dispatch 5126/2023 of 3 May
• Dispatch 3419-B/2022