Section II - limitations on the Power to tax

 

Article 150. Without prejudice to any other guarantees ensured to the taxpayers, the Union, the states, the Federal District and the municipalities are forbidden to:
I - impose or increase a tribute without a law to establish it;
II - institute unequal treatment. ent for taxpayers who are in an equivalent situation, it being forbidden to establish any distinction by reason of professional occupation or function performed by them, independently of the juridical designation of their incomes, titles or rights;
III - collect tributes:
a) for taxable events that occurred before the law which instituted or increased such tributes came into force;
b) in the same fiscal year in which the law which instituted or increased such tributes was published;
c) before the elapsing of ninety days counted from the date of publication of the law which institute them or raised them, with due regard of the provisions of letter b;

Letter c added by CA 42, December 19th 2003. Before this CA, it was usual to see the governments publishing a special issue of the official gazette on December 31st, only to increase taxes on January 1st. Now, the government must wait ninety days or until the next year, whatever comes later; however, there are exceptions, established by the paragraph 1 of this same article.

IV - use a tribute for the purpose of confiscation;
V - establish limitations on the circulation of persons or goods, by means of interstate or intermunicipal tributes, except for the collection of toll fees for the use of highways maintained by the Government;
VI - institute taxes on:
a) the property, income or services of one another;
b) temples of any denomination;
c) the property, income or services of political parties, including their foundations, of worker unions, of non-profit education and social assistance institutions, observing the requirements of the law;
d) books, newspapers, periodicals and the paper intended for the printing thereof.
Paragraph 1 - The prohibition set forth in item III, b, shall not apply to the taxes provided upon in articles 148, I, 153, I, II, IV and V, and 154, II; and the prohibition established by clause III, c, shall not apply to taxes mentioned in articles 148, I, 153, I, II, III and V, and 154, II, nor to the fixation of assessment bases of taxes mentioned in articles 155, III, and 156, I.

Paragraph 1: text in purple added by CA 42, December 19th 2003.

Paragraph 2 - The prohibition set forth in item VII a, extends to the autonomous government agencies and to the foundations instituted and maintained by the Government, as regards the property, income and services related to their essential purposes or resulting therefrom.
Paragraph 3 - The prohibitions set forth in item VI, a, and in the preceding paragraph do not apply to the property, income and services related to the exploitation of economic activities governed by the regulations which apply to private undertakings, or in which users pay consideration or prices or tariffs. nor exempt a promissory purchaser of real property from the obligation to pay tax thereon.
Paragraph 4 - The prohibitions set forth in item VI, subitems b and c encompass only the property, income and services related to the essential purposes of the entities mentioned therein.
Paragraph 5 - The law shall determine measures for consumers to be informed about taxes levied on goods and services.
Paragraph 6 - Any subsidy or exemption, reduction of assessment basis, concession of presumed credit, amnesty or remission, related to taxes, fees or contributions, may only be granted by means of a specific federal, state or municipal law, which provides exclusively for the above-enumerated matters or the corresponding tax, fee or contribution, without prejudice to the provisions of article 155, paragraph 2, item XII, g.

Paragraph 6. Text in purple appended by CA 3, March 17th 1993. Before this CA, governments used to, e.g., create a new exemption for producers of wheel chairs when issuing a law on behalf of disabled people.

Paragraph 7 - The law may impose upon the taxpayer the burden of the payment of a tax or contribution, whose taxable event will occur later, the immediate and preferential restitution of the amount paid being ensured, in case the presumed taxable event does not occur.

Paragraph 7 added by CA 3, March 17th 1993. The provisions of this paragraph are applied, for example, to the commerce of fuel, beer and tobacco. The producer of beer, when selling to the wholesalers, pays the taxes which should be paid later by the wholesaler, the retailer and the final consumer.

Article 151. It is forbidden for the Union:
I - to institute a tribute which is not uniform throughout the entire national territory or which implies a distinction or preference regarding a state, the Federal District or a municipality to the detriment of another, it being allowed to grant tax incentives for the purpose of promoting the balanced social and economic development of the various regions of the country;
II - to tax income from public debt bonds of the states, of the Federal District and of the municipalities, as well as the remuneration and earnings of the respective public agents, at levels above those established for its own bonds and agents;
III - to institute exemptions from tributes within the powers of the states, of the Federal District or of the municipalities.

Article 152. The states, the Federal District and the municipalities are forbidden to establish a tax difference between goods and services of any nature, by reason of their origin or destination.

SECTION III - FEDERAL TAXES

 

Article 153. The Union shall have the power to institute taxes on:
I - importation of foreign products;
II - exportation to other countries of national or nationalized products;
III - income and earnings of any nature;
IV - industrialized products;
V - credit, foreign exchange and insurance transactions, or transactions relating to bonds or securities;
VI - rural property;
VII - large fortunes, under the terms of a supplementary law.
Paragraph l - 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:
I - shall be based on the criteria of generality, universality and progressives, under the terms of the law;
II -

Clause II revoked by CA 20, December 15th 1998. Original text read: "II - shall not be levied, under the terms and within the limits established in law, on income deriving from retirement and pension paid by the social security system of the Union, of the states, of the Federal District and of the municipalities, to a person over sixty-five years of age, whose total income consists exclusively of work earnings."

Paragraph 3 - The tax established in item IV:
I - shall be selective, based on the essentiality of the product;
II - shall be non-cumulative, and the tax due in each transaction shall be compensated by the amount charged in previous transactions;
III - shall not be levied on industrialized products intended for export.
IV - shall have its impact deducted on the acquisition of productive assets by the taxpayer, in the manner determined by law.

Clause IV added by CA 42, December 19th 2002.

Paragraph 4 - The tax established in clause VI of this article:
I - shall be progressive and have their rates determined in such a manner as to discourage the retention of unproductive real property;
II - shall not be levied on small tracts of land, as defined in law, when explored by a proprietor who owns no other real property;
III - shall be audited and collected by the municipalities which so opt, in the manner prescribed by law, as long as that this option does not imply reduction of taxes or any other means of tax renounce.

Paragraph 4 reworded and amended by CA 42, December 19th 2003. The main modification was the inclusion of the possibility of the municipalities to take over the collection of this tax. The Federal government is the original competent body to collect this tax, but has no resources to do it. The original text read: "Paragraph 4 - The tax established in item VI shall have its rates determined in such a manner as to discourage the retention of unproductive real property and shall not be levied on small tracts of land, as defined in law, when a proprietor who owns no other real property explores them by himself or with his family."

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 caption 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:
I - thirty per cent to the state, the Federal District or the territory, depending on the origin;
II - seventy per cent to the municipality of origin.

Article 154. The Union may institute:
I - 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;
II - 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.