The National Tax System

Section 1: General Principles

Article 145. The Union, the states, the Federal District and the municipalities may institute the following tributes:

1. taxes
2. fees, by virtue of the exercise of police power or for the effective or potential use of specific and divisible public services, rendered to the taxpayer or made available to him;
3. benefit charges, resulting from public works.

Paragraph 1. Whenever possible, taxes shall have an individual character and shall be graded according to the economic capacity of the taxpayer, and the tax administration may, especially to confer effectiveness upon such objectives, with due respect to individual rights and under the terms of the law, identify the property, the incomes and the economic activities of the taxpayer.

Paragraph 2. Fees may not have the assessment basis reserved for taxes.

Article 146. A supplementary law shall: (CA No. 42, 2003)

1. provide for conflicts of competence concerning tax matters between the Union, the states, the Federal District and the municipalities;
2. regulate the constitutional limitations on the power to tax;
3. establish general rules concerning tax legislation, especially with regard to: a) the definition of tributes and their types, as well as, regarding the taxes specified in this Constitution, the definition of the respective taxable events, assessment bases and taxpayers; b) tax liability, assessment, credit, limitation and laches; c) adequate tax treatment for the cooperative acts of cooperative associations. d) the definition of a differentiated and favorable tax treatment to be given to micro and small businesses, including special or simplified tax regimes in the case of the tax set forth in article 155, II, the contributions set forth in article 195, I, and paragraphs 12 and 13, and the contribution referred to in article 239. The supplementary law referred to in item III, d, may also establish a single regime for the collection of taxes and contributions owed to the Union, the States, the Federal District, and the Municipalities, with due regard for the following: The Defense of the State and of the Democratic Institutions
4. it shall be optional for the taxpayer;
5. different eligibility requirements may be established for each State;
6. payment of said tributes shall be unified and centralized, and the distribution of the share of funds belonging to the respective units of the Federation shall be immediate, any withholding or establishment of conditions being forbidden;
7. collection, control, and claiming of payment may be shared by the units of the Federation, a single national roster of taxpayers being adopted. Article 146-A. A supplementary law may establish special criteria for taxation, with a view to preventing imbalances in competition, without prejudice to the power of the Federal Government to establish, by law, rules for the same purpose. (CA No. 42, 2003)

Article 147. In a federal territory, state taxes are within the competence of the Union and, if the territory is not divided into municipalities, also municipal taxes; municipal taxes are within the competence of the Federal District.

Article 148. The Union may, by means of a supplementary law, institute compulsory loans:

1. to meet extraordinary expenses resulting from public calamity, foreign war or the imminence thereof;
2. in the case of public investment of an urgent nature and relevant national interest, observing the provisions of article 150, III, b.

The use of funds deriving from a compulsory loan shall be linked to the expense that justified the institution thereof.

Article 149. The Union shall have the exclusive competence to institute social contributions regarding intervention in the economic order and the interest of categories of employees or employers, as an instrument of its activity in the respective areas, observing the provisions of articles 146, III, and 150, I and III, and without prejudice to the provisions of article 195, paragraph 6, as regards the contributions mentioned in the latter article.

Paragraph 1. The states, the Federal District, and the municipalities shall institute a contribution payable by their employees to fund the social security scheme referred to in article 40, for the benefit of such employees, and the respective rate may not be lower than the rate of the contribution paid by employees holding effective posts in the Union.

Paragraph 2. The social contribution taxes mentioned in the head paragraph of this article, as well as the contribution taxes regarding intervention in the economic domain:

1. shall not be levied on export earnings;
2. shall be also levied on the importation of foreign products or services;
3. may have the following rates: a) ad valorem rates, having as basis the proceeds, gross revenues, or the value of the transaction, and, in the case of importation, the customs value; 110 b) specific rates, having as basis the unit of measurement adopted. Paragraph 3. A natural person who is the recipient in an import transaction may be held as equivalent to a corporate body, under the terms of the law. Paragraph 4. The law shall establish the cases in which contributions will be levied only once.

Article 149-A. The Municipalities and the Federal District may establish a contribution, under the terms of their respective laws, to finance the public lighting service, with due regard for the provisions of article 150, I and III. (CA No. 39, 2002) The contribution mentioned in the head paragraph of this article may be charged to the consumer’s electricity bill.