Tax reform: what should change in IPVA and IPTU collections

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Despite the focus on consumption, the text approved in the first round by the Chamber of Deputies also deals with income and property taxation. Understand how the reform can change IPVA and IPTU José Furlan The basic text of the tax reform, approved in the first round by the Chamber of Deputies this Thursday (6), provides, among other points, changes in the collection of IPVA (Tax on Motor Vehicle Properties) and the IPTU (Tax on Urban Land and Property). The changes are foreseen in an excerpt that deals with the collection of taxes on income and assets — topics included in the proposal despite not being, at this first moment, the main focus of the reform, which is centered on consumption. Among the novelties are: FOR IPVA charging for jets, yachts and speedboats, which currently do not pay tax; possibility of progressive tax according to the environmental impact of the vehicle. FOR IPTU the update of the tax calculation base by means of a municipal decree (understand more below). What the text says about the IPVA — and how it can impact your pocket The opinion presented in the Chamber says that the IPVA can be progressive “also due to the environmental impact of the vehicle”. This indicates that electric vehicles, considered less polluting, should pay a lower percentage of the tax. The proposal says that this change “is in line with the most modern environmental proposals advocated worldwide and goes in the same direction as the carbon emission adequacy agreements to which Brazil is a signatory”. READ MORE: Free basic basket, ‘cashback’ and ‘sin’ tax: the main points of the reform Score was from 382 to 118: see how each deputy and party voted ‘The moment is historic’, says Lira when defending reform tax lawyer David Ximenes Avila Siqueira Telles, although the environmental aspects are positive, there is still a concern regarding a possible drop in revenue for states and municipalities. “If the government encourages an electric car, it will pollute states and municipalities less, which is a positive aspect”, he says. “But the biggest concern, especially for the states, is in relation to the rates — which will be fixed by a complementary law — and how the distribution of tax revenues will be.” The project voted in the Chamber still leaves room for the value of the vehicle to also be a tax progressivity criterion. The idea is to charge more from those with greater purchasing power. The measure proposes to introduce a “differentiation criterion” to encourage the purchase of more sustainable vehicles and increase the tax levied on more expensive models. The objective, according to the text, is to eliminate an “unjustified” privilege on goods that are normally “owned by people with high contributory capacity”. Also for the IPVA, the beginning of charging for water and air vehicles was defined. The current interpretation of the Federal Supreme Court (STF) on the subject is that the tax is levied only on land motor vehicles. The reform, therefore, must include the taxation of these types of properties in the Federal Constitution. The rapporteur for the proposal, Deputy Aguinaldo Ribeiro (PP-PB), says that the measure is not intended to burden aircraft and passenger transport boats or boats aimed at industrial, artisanal, scientific or subsistence fishing. There will also be no charge on oil platforms. “This tax will not have the bias of encumbering the productive activity. Its objective is to reach goods used by people with high purchasing power, which are not taxed today, in a clear mismatch with the tax applied on motor vehicles of popular use”, says the text. And the IPTU? On the subject, the project sought to meet a request from the National Confederation of Municipalities (CMN). Thus, it provides that city halls can update the tax calculation base by means of a decree, based on general criteria provided for in municipal law. For tax law specialist Patricia Fudo, partner at Maluf Geraigire Advogados, the decision creates “a higher tax collection potential”, precisely because it “facilitates municipal administrations to reach properties with high valuation”. In other words, from what the text indicates, there will be no need for the increase in IPTU to pass through the scrutiny of the Legislative Power. “The Executive will use this prerogative to impose increases [aumentos] this tax more easily and frequently, resulting in a greater burden for property owners, especially those with potential for appreciation”, he explains. Lawyer Siqueira Telles believes that, for municipalities, this is one of the most controversial taxes of the reform. says that, currently, IPTU is updated based on an amount lower than what a property usually costs. “There are properties that appreciate a lot. With this freedom for the definition by the city halls, the concern is that there may be loopholes for values ​​arbitrated unilaterally by the Tax Authorities”, he says. “The owners, in this case, should always observe the IPTU slip to verify the value on which the property is being evaluated. This allows the taxpayer to question the amount possibly arbitrated by the municipal Treasury”, he concludes.

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