Provisional Measure No. 1,399/2026: Setting Tax Rated for Excise Tax Rates
On November 4, 2026, Provisional Measure No. 1,399/2026 ("MP 1,399/2026") was published in a special edition of the Official Gazette (DOU), establishing the rates and supplementary rules for the Excise Tax (Imposto Seletivo - IS) for the 2027 calendar year, under a phased implementation regime.
As a general rule, these initial rates correspond to the Industrialized Products Tax (IPI) rates in effect on the date of publication of MP 1,399/2026. Among the main rates for 2027, the following stand out:
Vehicles classified under NCM heading 87.03: a base rate of 6.3%, adjusted based on criteria such as energy source and propulsion technology, energy efficiency, power, structural performance, and recyclability, and multiplied by a conversion factor of 1.21 (Art. 3, § 1, I, and Annexes I, II, and V of Provisional Measure 1,399/2026);
(i) Vehicles classified under NCM heading 87.03: a base rate of 6.3%, adjusted based on criteria such as energy source and propulsion technology, energy efficiency, power, structural performance, and recyclability, and multiplied by a conversion factor of 1.21 (Art. 3, § 1, I, and Annexes I, II, and V of Provisional Measure 1,399/2026);
(ii) Vehicles classified under headings 8704.21 and 8704.31, and under NCM codes 8704.41.00, 8704.51.00, 8704.60.00, and 8704.90.00: a base rate of 3.9%, adjusted according to the same sustainability criteria and multiplied by a conversion factor of 1.21 (Article 3, Paragraph 1, Item I, and Annexes I, III, and V of Provisional Measure 1,399/2026);
(iii) Cigarettes classified under NCM code 2402.20.00 (except those under Ex 01) and cigarillos classified under Ex 01 of NCM code 2402.10.00: an ad valorem tax rate of 66.7%, plus a specific tax of R$ 3.50 (Article 3, Paragraph 1, Item II, and Annex IV of Provisional Measure 1,399/2026);
(iv) Malt beers under NCM heading 22.03: a tax rate of 4.2% (Annex IV of MP 1.399/2026);
(v) Other alcoholic beverages classified under NCM headings 22.04 through 22.08: tax rates ranging from 8% to 24%, depending on the category (Annex IV of Provisional Measure 1,399/2026);
(vi) Sugar-sweetened beverages classified under NCM code 2202.10.00: 2.6% tax rate (Annex IV of Provisional Measure 1,399/2026);
(vii) Aircraft classified under NCM heading 88.02, except for code 8802.60.00: a tax rate of 6.8% (Annex V of Provisional Measure 1,399/2026); and
(viii) Motorboats [AO2.1]under NCM subheading 8903.3: 12% tax rate, and other motorized recreational or sports vessels under NCM heading 89.03: tax rate of 7.8% (Annex V of Provisional Measure 1,399/2026).
In the case of extracted mineral resources (oil, natural gas, and ores), the tax rates are reduced to zero through December 31, 2027 (Art. 6, III, “a”, 3, of Provisional Measure 1,399/2026).
Provisional Measure 1,399/2026 also reduces the IS tax rates to zero for vehicles registered as sustainable models that meet the established criteria (Art. 4, II), as well as for sustainable vessels and aircraft powered by electricity or with no direct CO2 emissions (Art. 4, III and IV).
For imports, the rates will be multiplied by an adjustment factor of 1.17 for vehicles, vessels, and aircraft; and by 1.45 for alcoholic and sugar-sweetened beverages, when the tax base corresponds to the customs value plus the Import Tax (Art. 8, § 1, I, of Provisional Measure 1,399/2026).
The Executive Branch must submit to the National Congress, by May 31, 2027, a bill setting forth the IS tax rates applicable as of January 1, 2028.
Provisional Measure No. 1,399/2026 entered into force on the date of its publication, but will take effect only as of February 2, 2027, and will remain in effect until the law establishing the rates effective in 2028 takes effect.
It should be noted that Provisional Measure No. 1,399/2026 has yet to be considered by the National Congress.
For further information regarding this Legal Update, please contact our tax team.
