Brazil sets transitional Selective Tax rules for 2027

A temporary first-year framework

The measure has force of law from publication and is now before Congress, but its operative provisions produce effects from 2 February 2027. It covers 2027 and remains in force until the later legislation on permanent rates takes effect. For vehicles, aircraft, vessels, tobacco products, alcoholic drinks and sugar-sweetened drinks listed in Complementary Law No. 214/2025, rates are calculated by applying prescribed conversion factors to initial rates derived from the relevant statutory or IPI schedule. This is a transition formula, not the permanent post-2027 rate regime.^[1][2][3]

Zero rates and product exclusions

The measure provides zero-rate treatment for qualifying vehicles acquired by people with disabilities or autism and by qualifying taxi drivers, registered sustainable vehicles meeting cumulative conditions, and specified vessels and aircraft whose propulsion produces no direct carbon-dioxide emissions. It also excludes qualifying cargo trucks of at least 3,500 kilograms gross weight, other than pickups meeting the measure's definition, and specified operational vehicles, vessels and aircraft for the armed forces or public-security bodies. Extracted minerals receive a temporary zero rate through 31 December 2027, while prognostics contests are subject to 0.5%.^[1][3]

Import factors require separate modelling

Where the specified customs-value base applies, the measure multiplies the applicable ad valorem rate by an adjustment factor of 1.17 for vehicles, vessels and aircraft, and 1.45 for alcoholic and sugar-sweetened drinks. Those adjustment factors apply cumulatively with the conversion factors. The Executive may reduce them, subject to a floor of 1.00 and the statutory conditions. Importers therefore need both the product classification and the relevant domestic conversion factor before determining the Selective Tax result.^[1]

Systems preparation before February

Manufacturers and importers should map covered products, verify TIPI and Complementary Law classifications, test zero-rate conditions and model the import factors before 2 February 2027. The Receita Federal may offer an assisted assessment: confirmation or adjustment constitutes acknowledgement of the debt, while failure to respond by the statutory completion deadline means the calculated balance is presumed correct. The measure does not establish an immediate new filing deadline in November 2026.^[1][3]

Congress may still change the regime

The Executive must submit a bill by 31 May 2027 for rates applying from 1 January 2028. The Senate records the provisional measure as in progress, with the congressional deliberation period running to 12 February 2027. Tax teams should treat the published rules as the operative transitional baseline while monitoring amendments, conversion into law and the later permanent-rate bill.^[1][2][3]