Section V - municipal taxes

Article 156. The municipalities shall have the competence to institute taxes on: I - urban buildings and urban land property; II - 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; III - services of any nature not included in article 155, II, as defined in a supplementary law. IV - (revoked)

The CA 3, March 17th 1993, revoked the former clause III, and turned clause IV into the current clause III. The former clause III read: "III - retail sale of liquid and gaseous fuels, except diesel oil." The supplementary law mentioned by clause III is Supplementary Law 116, July 31st 2003, which regulates the Tax on Services of Any Nature.

Paragraph 1 - Without prejudice of the progressivity based on time mentioned by article 182, paragraph 4, II, the tax of clause I may: I - be progressive in proportion to the value of the building; II - have different rates, in accordance with the localization and the use of the building.

Paragraph 1 amended by CA 29, September 13th 2000. Original text read: "The tax set forth in item I may be progressive, under the terms of a municipal law, in order to ensure achievement of the social function of the property."

Paragraph 2 - The tax set forth in item II: I - 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 resulting 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; III - is within the competence of the municipality where the property is located. Paragraph 3 - As regards the tax established in item III of the caption of this article, a supplementary law shall:

Text in purple added by CA 37, June 12th 2002.

I - establish its maximum and minimum rates;

Text in purple added by CA 37, June 12th 2002.

II - exclude exportations of services to other countries from levy of the said tax. III - regulate the manner and the conditions by which exemptions, incentives and fiscal benefits shall be granted and revoked.

Clause III added by CA 37, June 12th 2002. Check also the article 88 of the Temporary Provisions, which was also amended by this same CA. 

Section VI - tax revenue sharing

Article 157. The following shall be assigned to the states and to the Federal District: I - the proceeds from the collection of the federal tax on income and earnings of any nature, levied at source on income paid on any account by them, by their autonomous government entities and by the foundations they institute and maintain; II - twenty per cent of the proceeds from the collection of the tax that the Union may institute in the exercise of the powers conferred on it by article 154, I. Article 158. The following shall be assigned to the municipalities:  I - the proceeds from the collection of the federal tax on income and earnings of any nature, levied at source on income paid on any account by them, by their autonomous government entities and by the foundations they institute and maintain; II - fifty per cent of the proceeds from the collection of the federal tax on rural property, concerning real property located in the municipalities, or the totality of the proceeds, in case the municipality exercizes the option mentioned by article 153, paragraph 4, III;

Clause II, text in purple appended by CA 42, December 19th 2003.

III - fifty per cent of the proceeds from the collection of the state tax on the ownership of automotive vehicles licensed in the municipalities; IV - twenty-five per cent of the proceeds from the collection of the state tax on transactions regarding the circulation of goods and on rendering of interstate and intermunicipal transportation services and services of communication. Sole paragraph - The revenue portions assigned to the municipalities, as mentioned in item IV, shall be credited in accordance with the following criteria: I - at least three-fourths, in proportion to the value added in the transactions regarding the circulation of goods and the rendering of services carried out in the territory of the municipalities; II - up to one-quarter, in accordance with the provisions of a state law or, in the case of the territories, of a federal law. Article 159. The Union shall remit: I - of the proceeds from the collection of taxes on income and earnings of any nature and on industrialized products, forty-seven per cent as follows: a) twenty-one and a half of one per cent to the Revenue Sharing Fund of the States and of the Federal District; b) twenty-two and a half of one per cent to the Revenue Sharing Fund of the Municipalities; c) three per cent, for application in programs to finance the productive sector of the North, Northeast and Centre-West Regions, through their regional financial institutions, in accordance with regional development plans, the semi-arid area of the Northeast being ensured of half of the funds intended for that Region, as provided by law; II - of the proceeds from the collection of the tax on industrialized products, ten per cent to the states and to the Federal District, in proportion to the value of the respective exportations of industrialized products. III - of the proceeds from the colection of the contribution of intervention in the economic order established in article 177, paragraph 4, 29% (twenty-nine percent) to the States and the Federal District, distributed as defined by law, with due regards to the destination as provided by the clause II, c, of the mentioned article;

Clause III added by CA 44, June 30th 2004.

Paragraph 1 - For purposes of calculating the amount to be remitted in accordance with the provisions in item I, the portion of the collected tax on income and earnings of any nature assigned to the states, to the Federal District and to the municipalities shall be excluded, as provided by articles 157, I, and 158, I. Paragraph 2 - No federated unit may be allocated a portion in excess of twenty per cent of the amount referred to in item II, and any excess shall be distributed among the other participants, maintaining, for the latter, the apportionment criterion established therein. Paragraph 3 - The states shall remit twenty-five per cent of the funds they may receive as provided by item II to the respective municipalities, observing the criteria established in article 158, sole paragraph, I and II. Paragraph 4. Of the amount determined by clause III which belongs to each State, twenty-five percent shall be remitted to the respective municipalities, in the manner established by the law mentioned in said clause.

Paragraph 4 added by CA 42, December 19th 2003.

Article 160. It is forbidden to withhold or to make any restriction to the remittance and use of the funds assigned in this section to the states, to the Federal District and to the municipalities, including any tax additions and increases. Sole paragraph - The prohibition mentioned in the present article does not prevent the Union and the States from conditioning the remitting of funds to: I - the payment of credits, including those owned by the autarchies; II - the fullfilment of the provisions of article 198, paragraph 2, II and III.

Sole paragraph amended by CA 29, September 13th 2000.

Article 161. A supplementary law shall: I - define the added value for the purposes provided by article 158, sole paragraph, I; II - establish rules for the remittance of the funds referred to in article 159, especially the criteria for the sharing of the funds set forth in its item I, seeking to promote social and economic balance among states and among municipalities; III - provide for the monitoring, by the beneficiaries, of the calculation of the quotas and release of the participations set forth in articles 157, 158 and 159. Sole paragraph - The Federal Court of Accounts shall calculate the quotas referring to the participation funds mentioned in item II.  Article 162. The Union, the states, the Federal District and the municipalities shall announce, on or before the last day of the month following that of collection, the amounts of each of the tributes collected, the funds received. the tax sums remitted and to be remitted and the numerical expression of the apportionment criteria.  Sole paragraph - The data announced by the Union shall be discriminated by state and by municipality; those of the states, by municipality.