The Portuguese
legislation on the taxation of imported used vehicles has led to a continuous
interplay between the European Commission, the European Court of Justice, and
the national legislator. The Portuguese national budget for 2025 brings us the
latest development on this matter, with several amendments to the Vehicle Tax
Code coming into effect on the 1 January 2025. With this latest legislative
amendment, the Portuguese legislator has been successful in eliminating the
discriminatory taxation of imported hybrid vehicles from the European Union.
However, this legislative solution will result in situations of ‘reverse
discrimination’, since domestic vehicles will be subjected to less favourable
taxation rates than vehicles imported from the European Union.