A significant legal precedent has emerged in Portugal for people who have sold a vehicle but continue to receive tax notices. The Supreme Administrative Court (Supremo Tribunal Administrativo) has ruled that the IUC vehicle tax must be paid by the actual owner of the car, not by the person whose name remains listed in the registry.

The case stemmed from a dispute involving a bank that was charged more than €3,000 in taxes for 29 vehicles it had already sold. The judges concluded that a database entry alone does not prove ownership. If there is a sales contract confirming that the vehicle was transferred to a new owner, the tax authorities cannot demand payment from the former owner. Moreover, the authorities are required to refund any incorrectly collected amounts, together with interest.

The ruling highlights an important principle: documents carry more weight than bureaucratic formalities. The decision is particularly relevant ahead of the planned IUC reform, which is set to change the current vehicle tax payment system from 2027 onward.