II

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Text of the Constitutional Norms of Brazil on the Limits to the Power to tax

 

§7. Norms:

TITLE VI

On Taxation and Budget

CHAPTER I

The National Tax System

SECTION II

Of the limitations on the Power to Tax

 

Article 150. Without prejudice of others guarantees ensured to the taxpayer, it is prohibited to the Union, States, Federal District and to the Municipalities (1 - Liberty of Citizens x Actions of the State):

I - require or increase a tax without law which establishes the tax; (2 – Legality, Democratic Participation)

II - institute unequal treatment between taxpayers who are in equal situations, prohibited any distinction by professional occupation or function performed, independently of the juridical denomination of the income, titles or rights; (3 - Equity)

III - collect taxes:

a) concerning to the taxable facts occurred before the beginning of the legal validity of the law which instituted or increased the taxes; (4 – Ex post facto law)

b) in the same tax year in which occurred the publication of the law which instituted or increased the taxes; (5 - Annual Anteriority)

c) before elapsed the ninety days from the date of the publication of the law which instituted or increased the taxes, observed what was established in the item “b” above; (included by the Constitutional Amendment nş 42, of 12.19.2003);(6 – Nonagesimal Anteriority)

IV - use a tax with the effect of seizure; (7 - Seizure and Ability to Pay of the Taxpayer)

V - establish limitations on the circulation of persons or goods, by the institution of taxes inter-states or taxes inter-municipalities, excepting the collection of toll fees related to the use of highways maintained by the Public Power; (8 – Taxation, Fundamental Right of Free Movement and Right of Property)

VI - establish imposts on: (9 – Tax Immunity)

a) the property, the income or services of each other; (9.1)

b) temples of any cult; (9.2)

c) the property, the income or services of political parties, including their foundations, of the entities of labor unions, of the educational institutions and social assistance, without profit purposes (non-profits), observed the legal requirements; (9.3)

d) books, newspapers, periodicals and the paper intended for their printing; (9.4)

e) phonograms and music videofonograms made in Brazil, containing works of Brazilian authors, and/or works generally interpreted by Brazilian artists, as well as the material supports or digital files containing them, except in the stage of industrial replication of laser reading optical media (text established by the Constitutional Amendment nş 75, of 10.15.2013). (9.5)

§1ş – The prohibition of item III shall not apply to the imposts of the articles 153, I, II, IV and V, and 154, II.

§1ş - The prohibition of item III, b, shall not be apply to the taxes of the Articles 148, I, 153, I, II, IV and V; and 154, II; and the prohibition of item III, c, shall not apply to the taxes of Articles 148, I, 153, I, II, III and V; and 154, II, nor the fixation of the basis for calculation of the impost of Articles 155, III, and 156, I. (text established by the Constitutional Amendment n° 42, of 12.19.2003). (10 – Exceptions to Annual Anteriority and to Nonagesimal Anteriority)

§2ş - The prohibition of the item VI, "a", is extended to the government agencies and to the foundations instituted and maintained by the Public Power, as regarding the property, income and services related to their essential purposes or resulting from these. (11 – Constitution of the Public Administration for immunity purposes)

§3ş - The prohibitions established in Item VI, “a”, and in the precedent Paragraph do not apply to the property, income and services, related to the economical activities regulated by the norms applied to private undertaking, as well as do not apply to activities with counter-performance or payment of prices and rates by the user, neither exempt the prospective buyer of real estate of the obligation to pay taxes related to this operation. (12 – Restrictions of the Public Administration for Immunity purposes > Exception of the exception = Rule)

§4ş - The prohibitions established in Item VI, “b” and “c”, contain only the property, income and services related with the essential activities of the entities mentioned in these norms. (13 – Essential Activities of the juridical entities which are immune on taxation)

§5ş - The law will determine means for the enlightenment of the consumers about taxes charged on products and services. (14 – Governance in the Public Administration: Transparency on taxation)

§6ş - Any act of grace or forgiveness, related to tax or pension issues, only can be conceived by specific federal law, state law or municipality law.

§6ş - Any exemption or subsidy, reduction of basis calculation, concession of presumed credit, act of grace or forgiveness, related to imposts, taxes and contributions, only can be conceived by specific federal law, state law or municipality law, which regulates, exclusively, the issues mentioned or the related tax or contribution, without damage to the articles 155, § 2.ş, XII, g. (text established by the Constitutional Amendment n° 3, of 1993). (15 – Mechanisms to make harder the decline of tax collection)

§7ş - The law can attribute to passive person of tax obligation the liability condition by the payment of impost or contribution, whose event generator of the obligation shall occur later, secured the immediate and preferential restitution of the payed amount in the case of not occur the fact. (text established by the Constitutional Amendment nş 3, of 1993). (16 – Tax collection by presumed event generator of the obligation)

Article 151. It is prohibited to the Federal Union:

I - establish taxes which are not uniform in all Brazilian territory or which implies distinction or preference for State, Federal District or Municipality in relation to another, admitted the concession of tax incentive for promote the balance of socio-economic development between different regions of Brazil; (17 - Equal and unequal tax treatment: in search of balance)

II - charge taxes of the obligations of the public debt of States, Federal District and Municipalities, as well as charge taxes on the remuneration and incomes of the related publicly agents, on levels which excess the charged level of taxes of the Union and its agents; (18 – The economical perspective of the Union is the limit)

III - establish exemption of taxes of jurisdiction of States, Federal District or Municipalities. (19 – Autonomy among the legal entities which constitute the Brazilian State)

Article 152. It is prohibited to States, Federal District and Municipalities establish tax difference between goods and services, of any nature, based on their origin or destiny. (20 – The pursuit by the balance shall be made not only by the Federal Union, but, also, by States, Municipalities and Federal District)

 

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Rafael De Conti, Rafael Augusto De Conti, Brazilian Tax Lawyer, Lawyer in Brazil