Brazil has published the transitional rates and supplementary rules for its Imposto Seletivo (IS), or Selective Tax, for 2027, but the measure must still be converted into law by the National Congress before the tax becomes collectible.
Brazil’s President issued Provisional Measure No. 1,399 on 4 November 2026, setting the transitional rates and supplementary rules for the Imposto Seletivo (IS) for calendar year 2027. It was published the same day in an extraordinary edition of the Official Gazette. The measure has the force of law but remains subject to review and conversion by the National Congress.
Article 19 brings the measure into force on publication, with tax effects scheduled from 2 February 2027. Collection is not guaranteed. Under Articles 62(2) and 150(III) of the Constitution, the safeguards include conversion into law by 31 December 2026 for effects in the following financial year, plus the annuality and 90-day waiting rules. The congressional docket still showed the measure awaiting a joint committee, with amendments open until 10 November.
Vehicles, aircraft and vessels
Passenger vehicles in NCM/SH heading 87.03 start at 6.3%, while specified commercial vehicles start at 3.9%. The starting rate is adjusted in percentage points for propulsion technology, energy efficiency, power, safety features and recyclability. It is then multiplied by 1.21 to give the 2027 domestic ad valorem rate.
Specified aircraft in heading 88.02, excluding code 8802.60.00, face 6.8%. Motorboats in subheading 8903.3 are taxed at 12.0%, and other qualifying recreational or sports vessels in heading 89.03 at 7.8%.
Beverages, tobacco and betting
Sugary beverages in code 2202.10.00 carry 2.6%, and malt beer in heading 22.03 carries 4.2%. Other alcoholic beverages range from 8.0% to 24.0%, with other spirits in heading 22.08 at the top of the scale.
Specified cigarettes and cigarillos face 66.7% ad valorem plus BRL 3.50 per unit of 20 cigarettes where applicable. Other covered tobacco products in headings 24.01–24.04 face 37.5%. Covered concursos de prognósticos (lottery and betting contests) are taxed at 0.5%.
Zero rates and temporary relief
Article 4 provides a zero rate for eligible vehicle purchases by persons with specified disabilities or qualifying autism, and by authorised professional taxi drivers. Buyers need prior recognition by the Federal Revenue Service (RFB). Vehicles with the required sustainable-version registration also qualify, as do vessels and aircraft with no direct CO₂ emissions from main propulsion.
Article 5 provides non-incidence, rather than a zero rate, for trucks with a gross vehicle weight of at least 3,500 kg, excluding pickups. It also covers vehicles, aircraft and vessels for the exclusive use of the armed forces or public-security agencies.
Under Article 6, the rate on extracted mineral goods falls to zero through 31 December 2027. Qualifying small alcohol producers receive ad valorem reductions of 10% to 40% depending on volume. These are temporary measures, not permanent exemptions.
Imports
Under Article 8, the domestic ad valorem rate is multiplied by an adjustment factor where the base is customs value plus Import Duty. The factor is 1.17 for imported vehicles, vessels and aircraft, and 1.45 for alcoholic and sugary beverages. These factors adjust the rate and are not separate 17% or 45% taxes.
What comes next
Article 15 requires the Executive to submit a bill by 31 May 2027 on IS rates applicable from 1 January 2028. No 2028 rates are enacted by the measure.
The government says the transitional rates aim to keep tax burdens broadly similar to those under the Tax on Industrialised Products (IPI). That is a stated objective, not a verified outcome. Separately, PEC 22/2026, a proposed constitutional amendment on the IPI–IS transition, was presented on 5 November and remains pending.
