Federal TaxesNovember 20, 2021
Article 153. The Union shall have the power to institute taxes on.
- importation of foreign products;
- exportation to other countries of national or nationalized products;
- income and earnings of any nature;
- industrialized products;
- credit, foreign exchange and insurance transactions, or transactions relating to bonds or securities;
- rural property;
- large fortunes, under the terms of a supplementary law. Paragraph 1. The Executive Power may, observing the conditions and the limits established in law, alter the rates of the taxes enumerated in items I, II, IV and V. Paragraph 2. The tax established in item III:
- shall be based on the criteria of generality, universality and progressiveness, under the terms of the law;
Paragraph 3. The tax established in item IV:
- shall be selective, based on the essentiality of the product;
- shall be non-cumulative, and the tax due in each transaction shall be compensated by the amount charged in previous transactions;
- shall not be levied on industrialized products intended for export;
- shall have its impact reduced, as set forth by law, in the case of purchase of capital goods by a taxpayer who is liable to pay such tax. Paragraph 4. The tax established in item VI of the head paragraph:
- shall be progressive and its rates shall be determined in such a manner as to discourage the retention of unproductive real property;
- shall not be levied on small tracts of land, as defined in law, when a proprietor who owns no other real property exploits them;
- shall be controlled and collected by the Municipalities which opt to do so, under the terms of the law, provided that they do not reduce this tax or introduce any other type of fiscal waiver.
Paragraph 5. Gold, when defined in law as a financial asset or an exchange instrument, is subject exclusively to the tax established in item V of the head paragraph of the present article, due on the original transaction; the minimum rate shall be one per cent, and the transference of the amount collected is ensured under the following terms:
- thirty per cent to the state, the Federal District or the territory, depending on the origin;
- seventy per cent to the municipality of origin. Article 154. The Union may institute:
- by means of a supplementary law, taxes not instituted in the preceding article, provided that they are non-cumulative and not founded on a taxable event or an assessment basis reserved for the taxes specified in this Constitution;
- in the imminence or in the event of foreign war, extraordinary taxes, encompassed or not by its power to tax, which shall be gradually suppressed when the causes for their institution have ceased.
Section 4: State and Federal District Taxes
Article 155. The states and the Federal District shall have the competence to institute taxes on: (CA No. 3, 1993; CA No. 33, 2001; CA No. 42, 2003)
- transfer by death and donation of any property or rights;
- transactions relating to the circulation of goods and to the rendering of interstate and intermunicipal transportation services and services of communication, even when such transactions and renderings begin abroad;
- ownership of automotive vehicles.
Paragraph 1. The tax established in item I:
- regarding real property and the respective rights, is within the competence of the state where the property is located, or of the Federal District;
- regarding bonds, titles and credits, is within the competence of the Federal District or of the state where the probate or enrollment is processed, or where the donor is domiciled;
- a suplementary law shall regulate the competence for the institution of such tax: a) if the donor is domiciled or residing abroad; b) if the deceased owned property, was resident or domiciled or had his probate processed abroad;
- the Federal Senate shall establish the maximum rates for such tax. Paragraph 2. The tax established in item II shall observe the following:
- it shall be non-cumulative, and the tax due in each transaction concerning the circulation of goods or rendering of services shall be compensated by the amount 114 charged in the previous transactions by the same or by another state or by the Federal District;
- exemption or non-levy, except as otherwise determined in the law: a) shall not imply credit for compensation relative to the amount due in the subsequent transactions or renderings of services; b) shall cause the annulment of the credit for the previous transactions;
- it may be selective, based on the essentiality of the goods or services;
- a resolution of the Federal Senate, on the initiative of the President of the Republic or of one-third of the Senators, approved by the absolute majority of its members, shall establish the rates that apply to interstate and export transactions and rendering of services;
- the Federal Senate may: a) establish minimum rates for domestic transactions, by means of a resolution on the initiative of one-third and approved by the absolute majority of its members; b) establish maximum rates for the same transactions to settle a specific conflict involving the interest of the states, by means of a resolution on the initiative of the absolute majority and approved by two-thirds of its members;
- unless otherwise determined by the states and the Federal District, under the terms of the provisions of item XII, g, the domestic rates for transactions concerning the circulation of goods and the rendering of services may not be lower than those established for interstate transactions;
- the following shall be adopted for transactions and rendering of goods and services to end-users located in another state: a) the interstate rate, when it is incumbent upon the recipient to pay that tax; b) the internal rate, when it is not incumbent upon the recipient to pay that tax;
- in the case of subitem a of the preceding item, the tax corresponding to the difference between the internal and the interstate rate shall be attributed to the state where the recipient is located;
- it shall also be levied: a) on the entry of goods or products imported from abroad by an individual or corporate body, even in the case of a taxpayer who does not pay such tax on a regular basis, regardless of its purpose, as well as on services rendered abroad, and the tax shall be attributed to the state where the domicile or the establishment of the recipient of the product, good, or service is located; b) on the total value of the transaction, when goods are supplied with services not included in the power to tax of the municipalities;
- it shall not be levied: a) on transactions involving goods to be shipped abroad, nor on services to be delivered to parties abroad, and tax charges and credits in preceding transactions involving such goods or services shall continue in effect; Taxation and Budget 115b) on transactions transferring petroleum, including lubricants, liquid and gaseous fuels derived therefrom, and electric energy to other states; c) on gold, in the cases defined in article 153, paragraph 5; d) on communications services in the modes of sound broadcasting and sound and image broadcasting which are available for reception by the public free of charge;
- its assessment basis shall not include the amount of the tax on industrialized products when the transaction carried out between taxpayers and concerning a product intended for industrialization or sale represents a taxable event for both taxes;
- A supplementary law shall: a) define its taxpayers; b) provide for tax substitution; c) regulate the system of tax compensation; d) establish, for purposes of collection of the tax and definition of the responsible establishment, the location of the transactions concerning the circulation of goods and the rendering of services; e) exclude from levy of the tax, in exports to other countries, services and other products other than those mentioned in item X, a; f) provide for the event of maintenance of a credit for services and goods remitted to another state and exported to other countries; g) regulate the manner in which, through deliberation by the states and the Federal District, tax exemptions, incentives and benefits shall be granted and revoked; h) define the fuels and lubricants on which this tax shall be levied only once, regardless of its purpose, in which case the provision of item X, b, shall not apply i) stipulate the assessment basis so as to include the amount of the tax, also in the event of importation of goods, products, or services from abroad. Paragraph 3. With the exception of the taxes mentioned in item II of the head paragraph of the present article, and article 153, I and II, no other tax may be levied on transactions concerning electric energy, telecommunications services, petroleum products, fuels, and minerals of the country. Paragraph 4. In the event of item XII, h, the following shall apply:
- in transactions involving lubricants and petroleum-derived fuels, the tax shall be attributed to the state where consumption takes place;
- in interstate transactions among taxpayers involving natural gas and its by-products, and lubricants and fuels not included in item I of this paragraph, the tax shall be shared by the state of origin and the state of destination, and the proportion existing in transactions involving other goods shall be observed
- in interstate transactions involving natural gas and its by-products, and lubricants and fuels not included in item I of this paragraph, when it is not incumbent upon the recipient to pay the tax, such tax shall be attributed to the state of origin;
- the tax rates shall be defined by joint decision of states and the Federal District, under the terms of paragraph 2, XII, g, with due regard for the following: a) they shall be uniform throughout the national territory, and they may be different for each product; b) they may be specific, according to the unit of measurement adopted, or ad valorem, levied on the value of the transaction or on the price the product or a similar product would be sold for in free competition circumstances; c) they may be lowered and restored to their original levels, and the provision of article 150, III, b, shall not apply thereto.
Paragraph 5. The rules for the enforcement of the provisions of paragraph 4, including those concerning the collection and assignment of the tax, shall be established by joint decision of states and the Federal District, under the terms of paragraph 2, XII, g.
Paragraph 6. The tax established in item III:
- shall have its minimum rates stipulated by the Federal Senate;
- may have different rates according to type and utilization.
Section 5: Municipal Taxes
Article 156. The municipalities shall have the competence to institute taxes on:
- urban buildings and urban land property;
- inter vivos transfer, on any account, by onerous acts, of real property, by nature or physical accession, and of real rights to property, except for real security, as well as the assignment of rights to the purchase thereof;
- services of any nature not included in article 155, II, as defined in a supplementary law;
Paragraph 1. Without prejudice to the progressiveness in time mentioned in article 182, paragraph 4, item II, the tax referred to in item I may:
- be progressive according to the value of the property; and
- have different rates according to the location and utilization of the property.
Paragraph 2. The tax set forth in item II:
- shall not be levied on the transfer of goods or rights incorporated into the assets of a corporate body to pay up its capital, nor on the transfer of goods or rights Taxation and Budget 117resulting from the merger, incorporation, division or dissolution of corporate bodies, unless, in such cases, the predominant activity of the purchaser is the purchase and sale of such goods or rights, the lease of real property or leasing
- is within the competence of the municipality where the property is located.
Paragraph 3. As regards the tax established in item III of the head paragraph of this article, a supplementary law shall:
- establish its maximum and minimum rates; tax;
- exclude exportations of services to other countries from levy of the said
- regulate the manner and conditions for the granting and revocation of fiscal exemptions, incentives, and benefits.