Government allows IPI reduction on vehicles in stock

President Jair Bolsonaro (PL) issued a decree that allows the incidence of the reduction of the IPI (Tax on Industrialized Products), announced in February by the government, also on vehicles in stock at dealerships.

At the end of last month, the government applied a cut in the IPI of several products, such as cars, refrigerators, cell phones and televisions. In the case of vehicles, the reduction was 18.5%.

Fenabrave (National Federation of Automotive Vehicle Distribution) had been pleading with the Ministry of Economy that the benefit also apply to cars in stock at dealerships. The federation calculates current stock in stores at around 83,000 units.

The decree published this Wednesday authorizes distributors to carry out the fictitious return of new vehicles that were in stock on February 25, 2022 – the day of the original IPI cut decree.

The fictitious return only occurs through the issuance of tax documents.

Manufacturers, in turn, will be able to return the vehicle’s invoice to dealerships with the reduced tax.

These return operations may take place until the end of June this year.

“This is a measure that, by providing for obligations related to the issuance and registration of invoices, aims to enable the reduction of the IPI rates levied on automobiles, in addition to making competition in the market more balanced, not disfavoring dealerships that, at the time of the reduction of the rates, they had low stock”, said the General Secretariat of the presidency, in a note sent about the new decree.

“In summary, the measure allows dealerships that already had vehicles in stock on the date of the IPI reduction to benefit from the tax reduction, without having to physically return the vehicle to the vehicle manufacturers and assemblers. request the change until June 30, 2022, being authorized the issuance of a new invoice with the lower IPI value, without the vehicle having to be physically returned to the automaker”, he concluded.