Next Year, Electric and Hybrid Car Owners Will Be Able to Collect Only 50% of the Vehicle Tax, Where the Tax Will Be Converted into Credit for Property Tax.
Electric and hybrid cars in São Paulo will receive a significant discount on the Vehicle Property Tax (IPVA). This week, an action by Mayor Ricardo Nunes (MDB-SP) signed an expansion of the incentive for electrified vehicles. Therefore, the measure will apply to models powered by hydrogen fuel cells, which are still far from Brazilian streets as they are still in the development phase.
Although the reality is still somewhat distant, the São Paulo mayor’s decision will forgo the collection of 50% of the IPVA amount paid in the city. Thus, electric and hybrid car owners will pay only half of the tax, which is directed to the coffers of the state of São Paulo. It is also important to recall that in the state, electric and hybrid car owners have had a discount on the IPVA since 2014. However, previously, the deduction only applied to vehicles priced up to R$150,000. As a result, the existing ceiling did not cover most electric cars for sale in the country during the discount concession period.
On the other hand, it is important to emphasize that there was no standardization regarding the refund of the tax. Therefore, in 2021, the São Paulo City Hall enacted law 17.563, which allows drivers of electrified cars to have part of the tax amount turned into credit for Property Tax payment. During the opening of the Congress and Fenabrave Expo (National Federation of Motor Vehicle Distribution), the mayor of São Paulo announced that the city hall is forgoing its share of the IPVA for electric and hybrid cars. Thus, anyone who acquires electric cars in the city of São Paulo and registers them there will be entitled to the discount on the portion that would be destined to the municipality.
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Electric and Hybrid Cars Also Received a Discount on Property Tax
In addition to the decision regarding the IPVA, Nunes also announced earlier this month that all electric and hybrid cars will have a discount on the Property Tax. Thus, the deduction allows part of the IPVA amount to be converted into credit for Property Tax payment. Therefore, the discount per unit can reach R$3,292.21.
Incentive for Electric Cars Is a Measure to Clean the City
During the 30th Congress and Expofenabrave held at the São Paulo Expo on September 21 and 22, several speeches were made by the mayor of São Paulo. During his speech, Nunes pointed out that this tax incentive is part of a series of measures aimed at providing a cleaner and more ecological city. To this end, he also announced plans to replace 30% of the diesel bus fleet with electric vehicles starting in 2024. In total, it is expected that 2,600 models with zero pollutant gas emissions will hit the streets.

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