Hybrid Cars Exempt from IPVA in São Paulo: What You Need to Know
In a recent announcement from the São Paulo State Secretary of Finance and Planning, it has been clarified that only two hybrid vehicle models will be exempt from the Imposto sobre a Propriedade de Veículos Automotores (IPVA) tax. The exemption applies to the Toyota Corolla Hybrid and the Toyota Corolla Cross Hybrid, which meet specific criteria outlined in Portaria SRE 94/2024.
The criteria for this tax exemption include a minimum electric motor power of 40 kW (approximately 54 horsepower) and a minimum voltage system of 150 volts. Additionally, eligible vehicles must have a market value of no more than R$ 250,000.
This tax benefit is not permanent and is set to remain in effect only until December 31, 2026. Following this two-year exemption period, the IPVA tax rate will gradually increase: starting with a 1% rate in 2027, followed by 2% in 2028, 3% in 2029, and reaching the standard 4% rate by 2030.
It is important to note that this regulation does not extend to fully electric vehicles, and currently, hydrogen-powered cars are not available for purchase in Brazil. According to the São Paulo Secretary of Finance, there are approximately 28,000 vehicles in the state that qualify for this tax exemption, representing a projected revenue loss of R$ 163 million for the year 2025. It is anticipated that this number could increase by around 10,000 vehicles in the following year, raising the potential tax exemption to R$ 206 million.
In a related development, shortly after the announcement of the tax exemption, BYD declared that it would offer a free IPVA for its entire line of hybrid passenger vehicles. However, it is worth mentioning that BYD's models do not fulfill the requirements set by the São Paulo government.
As the automotive market continues to evolve, these developments reflect the growing emphasis on hybrid and electric vehicles in Brazil. The government's initiative aims to encourage the adoption of more environmentally friendly transportation options, albeit within a structured regulatory framework.
