On 8 July 2022, Law No. 14,395 was published in an extra edition of the Official Federal Gazette to define the concept of "praça" when determining the minimum taxable value (MTV) in excise tax (IPI) calculations.(1) According to this law, praça must be understood as the city where the sender is located, which aligns with the initial Federal Revenue of Brazil (FRB) definition that appeared in Normative Opinion CST No. 44/1981.

Clarifying this legal concept will put an end to many related administrative and judicial disputes. Article 195 of the IPI Regulation (Decree No. 7212/2010), based on article 15 of Law No. 4,502/1964, provided that the MTV is the current price in the wholesale market of the sender's praça when a product is sent between the sender's own establishments or the establishment of a firm with which it has an interdependent relationship; however, it lacked a clear definition of "praça".

Against this backdrop, the FRB adopted a broad understanding of praça, sometimes even considering it to mean the whole country, which is unreasonable.

With the inclusion of article 15-A in Law 4552/1964, federal taxpayers can now safely calculate the MTV as the tax base for IPI, with the understanding that the praça is limited to the city where the sender is located.

For further information on this topic please contact Cecilia Yokoyama or Thiago Nunes Faulin at Machado Associados by telephone (+55 11 3819 4855) or email ([email protected] or [email protected]). The Machado Associados website can be accessed at www.machadoassociados.com.br.


(1) Depending on the context, "praça" may refer to, among other things, a public square or marketplace.