Tax on Industrialized Products (IPI) – New Table of Taxes on Industrialized Products published brings IPI rates reduced from 25% to up to 35%

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The recently published TIPI (Table of Taxes on Industrialized Products), which enters into force on May 1st, 2022, was reenacted by the Federal Government to add the reduction of IPI (tax on industrialized products) rates; the reduction goes from 25% to up to 35%. The new measure was published today (29) in the official federal gazette and enters into force as annex to Decree No. 11.055/2022.

It is of utmost importance to clarify that, as of 05/01/2022, the (IPI) taxpayer is already entitled to pay the IPI tax at a reduced rate of up to 35%, according to the product. It should be noted that the 18.5% rates for products categorized under TIPI’s 87.03 position (passenger vehicles and other vehicles) code were maintained.

The IPI is a federal tax levied upon national and foreign industrialized products.

The following are required to pay the IPI as taxpayers:

I – the importer, in connection with the triggering event arising from customs clearance of product of foreign origin;

II – the industrialist, in connection with the triggering event resulting from the removal of the product industrialized in his/her establishment, as well as in connection with other triggering events resulting from his/her actions;

III – the industrial equivalent establishment, in connection with the triggering event concerning products that leave such establishment, as well as other triggering events resulting from its actions;

IV – those who consume or otherwise use, or send to people other than newspaper or publishing companies, the paper intended for book, newspaper and magazine printing, exempted from taxation.

The industrialist or industrial equivalent is also responsible, due to taxpayer substitution, for operations carried out prior to, concurrently or subsequently to the product removals promoted thereby, in the cases and under the conditions established by the Internal Revenue Service.

Written by Romário Sousa, Tax Analyst at Drummond Advisors