Even in 2021, a large number of people still don't know what IPVA is.

As crazy as it may sound, homeowners are unaware of what this type of tax, which many people hate paying, actually entails. 

Every year-end is marked by costs that strain the budgets of many people. 

It's common for costs to triple between January and March, and one of the culprits in this whole story is the IPVA (Vehicle Property Tax). 

For those who own older cars, the IPVA (Vehicle Property Tax) is an expense that is impossible to avoid. 

However, although it is known by many and unknown by others, the IPVA (Vehicle Property Tax) generates a number of questions. 

So, in today's article, we're going to show you what IPVA is and reveal a lot about it. 

Ready to discover everything and more about IPVA (Vehicle Property Tax)?

So, let's get started!

What exactly is IPVA? 

IPVA is the acronym for: Tax on the Ownership of Motor Vehicles.

It affects vehicle owners throughout Brazil. 

This tax is actually a rate charged on the market value of the car.

The IPVA (Vehicle Property Tax) is collected by FIPE – Fundação Instituto de Pesquisas Econômicas (Foundation Institute of Economic Research).

The same thing that the FIPE Table does. 

The tax rate is determined by the government of each state.

Thus, the values vary from one state to another.

Generally, the values are different for passenger cars, trucks, and pickup trucks.

However, depending on the state, they may be the same. 

Typically, the tax rate ranges between 1% and 6% of the vehicle's market value. 

Because you need to pay the IPVA (Vehicle Property Tax) to guarantee the vehicle's registration, which is what allows the vehicle to circulate on the country's roads. 

As mentioned, older vehicles are exempt from IPVA (Vehicle Property Tax). In other words, they do not have to pay the tax. 

But this is something that varies from state to state here in Brazil. 

The minimum manufacturing ages for a vehicle to be exempt from IPVA (Vehicle Property Tax) are as follows for each state:

Using the example of São Paulo, which is the most populous state in Brazil:

If the car is from the year 2000 or earlier, you don't need to pay this vehicle tax.

The IPVA (Vehicle Property Tax) came into existence in 1986 with the objective of replacing the Single Road Tax – TRU. 

This fee was linked to expenses related to the transportation system. 

Unlike what was done by TRU, the IPVA (Vehicle Property Tax) is not always used for the improvement of roads and streets. 

The total revenue collected from the tax is divided between the municipality where the vehicle is registered, the state, and the Federal Government. 

Thus, the collected funds are applied according to need: whether in education, health, or mobility. 

Now that you know what IPVA is, you're probably wondering:

What happens if I don't pay this tax?

Contrary to what many people believe, the government does not offer discounts or forgive debts in cases of unpaid vehicle tax. 

Not paying taxes causes a LOT of headaches and serious consequences.

This is because the government has a policy of adding interest and penalties on top of the debt amount. 

Thus, in the medium and long term, this turns into a real snowball effect. 

In the state of São Paulo, for example, the situation is quite bad:

Those who fail to pay the tax are subject to a fine of 0.33% for each day of delay, in addition to late payment interest, a rate charged for the delay over a period based on the well-known Selic rate.

After a 60-day delay, the penalty percentage is fixed at 20% of the tax amount. 

Furthermore, the vehicle owner ends up with their name registered in the State's Debt Registry. 

This Cadin is a registry of defaulters that prevents citizens from obtaining various types of credit. 

And there's more. 

Once the IPVA (Vehicle Property Tax) debt is registered in Cadin (National Registry of Defaulting Taxpayers), the State Attorney General's Office is authorized to collect it through legal action. 

Furthermore, non-payment leads the citizen to incur an active debt. 

Active debt refers to the listing of the owner's CPF (Brazilian taxpayer ID) that includes public debts, such as vehicle tax (IPVA), property tax (IPTU), and traffic and environmental fines. 

And as if all the trouble for the vehicle owner wasn't enough, a car that hasn't paid the tax can't be driven. 

If a vehicle with overdue IPVA (Vehicle Property Tax) is caught on the road, it is seized and taken to the impound lot. 

And from there, it will only see the streets again if the owner settles the debts and pays for the impound lot, or after being auctioned off to cover the owner's debts.

Therefore, if you own any type of vehicle, the rule is clear: pay your vehicle tax (IPVA) on time!

Knowing how IPVA is calculated is just as important as knowing what it is. 

Our experts always suggest that you calculate this tax before buying any type of vehicle.

This allows you to know the exact amount of the tax and whether or not it will impact your budget. 

Every year the government releases a table with IPVA tax rates for all vehicle categories. 

These rates are used in the calculation that determines the value of the 2021 IPVA (Vehicle Property Tax).

The percentage varies over the years. Therefore, it's necessary to keep an eye on the Fipe Table to check the amount of vehicle tax you will pay. 

Currently, the tax rate table is as follows:

Therefore, with these percentages in hand, it becomes easy to calculate the IPVA (Vehicle Property Tax). 

But another important point to know is that each state can assign a different tax rate each year. 

So, let's take the example of the state of São Paulo, for instance, where a gasoline-powered vehicle has a tax rate of 4%.

Let's say you have a gasoline-powered vehicle worth R$ 40,000 with a tax rate of 4%.

The calculation, then, is as follows:

40,000 (which is the value of the car) x 0.04 (which is the vehicle tax rate) = R$ 1,600.

The tax amount for this vehicle is R$ 1,600.

Now that you know what IPVA is and everything about this tax, how about learning how to check your IPVA balance?

Checking the status is the most accurate way to find out how much you will pay for your car's IPVA (vehicle property tax).

The query includes model, version, fuel type, and year of manufacture.

Finding out is easy. Just click the button below!