According to Article 155, III of the Constitution of the Federative Republic of Brazil, the IPVA is a tax levied by the states and the Federal District on the ownership of motor vehicles. Paid annually, the tax is calculated on the value of the model and year of the vehicle, according to the FIPE table.
Since it is a tax, i.e. a non-binding tax (art. 167, IV, CRFB/88), it is not possible to determine exactly where the money collected from the IPVA will be spent. The constitutional provision itself, however, reserves the possibility of earmarking for the following cases:
“The distribution of the proceeds of the taxes referred to in articles 158 and 159, the allocation of resources for public health actions and services, for the maintenance and development of education and for carrying out tax administration activities, as determined, respectively, by articles 198, § 2, 212 and 37, XXII, and the provision of guarantees for credit operations in anticipation of revenue, as provided for in art. 165, § 8, as well as the provisions of § 4 of this article”.
The division of the collection referred to above is precisely what determines the division between states and municipalities, so that 50% of the funds from IPVA must be allocated to the municipalities where the land motor vehicles are licensed, or in relation to water and air vehicles, whose owners are domiciled in their territories.
What are the penalties for not paying the IPVA on time? Do they differ from state to state?
As this is a state and federal tax, the penalties for non-payment of IPVA are diverse and vary according to the regulations of the federal state. However, the most common penalties include daily fines and interest, registration as an active debtor, denial of the CPF and, in some cases, even seizure of the vehicle.
In addition, although there is no legal provision preventing vehicles from being driven when the IPVA has not been paid, defaulting on the tax makes it impossible to license the asset, which, if it falls due, prevents the vehicle from being driven.
Finally, I would like to point out that it is possible to pay the IPVA after the deadline, and that the state may grant installments of the overdue debt.
How do fines and interest apply to late payment of this tax?
The application of fines and interest is regulated by each tax authority. However, there are some common aspects: according to article 113 of the National Tax Code, the tax obligation can be principal or accessory.
While the main obligation arises with the occurrence of the triggering event (in this case, the ownership of motor vehicles), accessory obligations arise from tax legislation and have as their object positive or negative services in the interest of tax collection or inspection.
It is important to note that fines and interest, although initially ancillary, become principal obligations in the event of non-compliance (§ 3, art. 113, CTN). Therefore, any application of the law would innovate the tax debt, and the Administration could use the same means it uses to collect taxes to collect fines and interest.
In order to regularize the situation before the other sanctions are imposed, the taxpayer must access the website of the Finance Department of the state where the vehicle is registered, issuing a new payment slip that will include the fines and interest accrued.
Are IPVA exemptions decided independently by the states or by the federal government?
Since it is a state tax, the Federal Government cannot set rates or exemptions to the tax, except for the setting of minimum rates by the Federal Senate (art. 155, CRFB/88).
In addition to the rates varying between states, so do the exemptions, which can, however, be reviewed in court.
Some of the common exemptions granted by the states are for: vehicles owned by people with disabilities (PwD), vehicles over 10, 15 or 20 years old, taxi drivers and philanthropic organizations.
Who is exempted from paying the IPVA? What criteria are used?
As explained above, the IPVA exemptions vary from state to state, but generally include criteria such as: the age of the vehicle (more than 10, 15 or 20 years old), ownership by people with disabilities (visual, mental or multiple), ownership by philanthropic organizations and public bodies and vehicles for professional use (cabs, school transport vehicles, etc.).
To apply for exemption, it is necessary to follow state-specific procedures, which generally include presenting supporting documents, vehicle registration certificates, and specific forms available on the websites of the state Treasury Departments or Detrans.
What are the criteria and deadlines for an IPVA debt to be filed for protest?
The criteria and deadlines vary slightly from state to state, since the competence to legislate on the IPVA lies with the state.
However, based on the State of São Paulo and State Law No. 12.799/2008, the deadline for registration as an active debt is 90 days from the issue of the Cadin notice, published in the Official State Gazette, and additionally by post or other electronic means of communication (§ 2, art. 3 Law No. 12799/08).
The communication is considered to have been made 15 days after the date of publication in the Official State Gazette, the date on which the electronic message was sent, or the date on which the communication was sent by post (§ 6, art. 3 Law No. 12799/08), at which point the 75-day period for inclusion of the debt in the state Cadin begins (art. 3, main section, Law No. 12799/08).
After registration as an active debt, the protest can take place after 12 months of inertia on the part of the taxpayer.
How does the IPVA protest process work and what are the steps before the taxpayer is notified?
The IPVA is protested at the registry office after it has been registered as an active debt, as explained above. Once registered, the administration of the debt is transferred to the State Attorney General’s Office (PGE), which will forward the debt to the Protest Notary Office and can initiate the judicial enforcement procedure.
Once the tax debt has been protested, the protest office sends a notification letter to the taxpayer, informing them of the debt and giving them up to three working days to settle.
After the protest, what financial restrictions can the taxpayer face?
After the protest of an unpaid IPVA debt, the taxpayer ends up with a “bad credit record”, which is a negative mark on their credit history. If the debtor’s delay is duly proven by registering the debt with a notary office, the taxpayer may suffer from: limited access to credit (inclusion in credit protection registers such as SPC and Serasa, making it difficult to obtain financing and loans), banking restrictions (difficulties in obtaining checkbooks and credit cards), impediments to commercial transactions and a general impact on financial reputation.
For companies, what are the main risks of the IPVA protest in terms of credit and business operations?
As with individual taxpayers, the protest of IPVA on behalf of legal entities can have consequences in terms of both credit and commercial operations.
Among the main impacts are: difficulty in accessing credit (financing and loans), cancellation of banking services (such as overdrafts, issuing checks and credit cards) and a negative impact on their reputation in the market, especially with suppliers, clients and business partners, making future negotiations and partnerships difficult. In more extreme cases, operations can even be paralyzed, especially after measures such as the judicial blocking of values and assets have been put in place.
What are the steps to settle a protested IPVA debt?
In order to settle the IPVA debt that has already been protested, it is essential to consult the website of the Finance Department or Detran of the relevant state. At the website, taxpayers should be able to see the total amount of outstanding debt, including fines, interest and notary fees, and then issue an updated payment slip – which will include all additional charges.
Once issued, payment must be made at an authorized bank or through online services offered by the state. With proof of payment in hand, the interested party must go to the notary office where the debt was protested to request that the protest be canceled – at which point they will have to pay the notary office’s cancellation fees.
Finally, the records should be updated automatically, and it is up to the taxpayer to certify that their name has been removed from the credit protection registers (SPC, Serasa) and that the vehicle has been regularized for licensing.
In the event of the sale of a vehicle with overdue IPVA, can the new owner take over the debt or is it still linked to the previous owner?
To begin with, it is important to note that the possibility of selling a vehicle with overdue IPVA depends on the state legislation of the jurisdiction where the vehicle is registered.
If there is a possibility of sale, responsibility for paying the tax generally remains with the registered owner when the IPVA is due. However, it can be stipulated that the new owner will assume the tax debt prior to the transfer.
After the disposal, even if the DETRAN has not been notified of the sale, the former owner is no longer liable for any IPVA debts, according to the Superior Court of Justice (Precedent No. 585). However, failure to notify the agency may result in the former owner being jointly and severally liable for other penalties arising from infractions committed after the sale, under the terms of Article 134 of the Brazilian Traffic Code.
Is there an average IPVA default rate in Brazil? Could any specific economic factors have an impact on this year’s figures?
A survey carried out at the end of 2024 by the Zapay platform, linked to Serasa, showed that the IPVA default rate in Brazil was approximately 42.2%.
The economic factors that contribute to this high rate are diverse and often perennial, reflecting the economic difficulties faced by taxpayers, such as high inflation, rising interest rates, economic instability and rising unemployment.
Are there any legislative proposals or current debates on changes to IPVA collection or penalties that taxpayers should be aware of?
Currently, the law that brings the most significant changes to the collection of IPVA at national level is Complementary Law 214/2025, which provides for the levying of the tax on water and air vehicles, such as yachts, speedboats, private planes and helicopters.
Other aspects of tax collection and penalties vary from state to state, and taxpayers should keep an eye on the official media of the federative entity in which their vehicle was licensed.
Available in: https://www.anoreg.org.br/site/wp-content/uploads/2025/05/Cartorios-com-Voce-38.pdf
Autor: Flávia Sant'Anna Benites • email: flavia@ernestoborges.com.br • Tel.: +55 67 99984 1406
