The National Confederation of Municipalities provides this noble summary:
IPTU - Urban Property Tax
A tax under municipal jurisdiction (Federal Constitution, art. 156, I), whose taxable event is urban property and land ownership, as well as its beneficial ownership and possession, characterizing it as a tax on assets, according to the classification adopted by Constitutional Amendment No. 18/65, regulated by the National Tax Code - Law No. 5.172/66. It is essential that the Municipality's fiscal activity does not exceed its urban zone, which must be defined by municipal law, covering urbanized, urbanizable, and urban expansion areas (CTN, art. 32, paragraphs 1 and 2). The tax base is the market value of the property, under the terms of art. 33 of the CTN. Hence the importance of the Municipality having an always up-to-date property registry.
The taxpayer is the owner, the holder of beneficial ownership, or the possessor under any title of the property subject to taxation (CTN, art. 34). The major innovation regarding this tax is that Constitutional Amendment No. 29, in its article 3, inserts paragraphs I and II into paragraph 1 of article 156 of the Federal Constitution, allowing the tax to be progressive based on the property value and to have differentiated rates based on the property's location and use. Complementarily, Law No. 10.257 of July 10, 2001, in its art. 7, regulates the progressivity over time of IPTU rates for undeveloped, underutilized, or unused land. These changes, if implemented in the Municipality, can lead to a significant increase in tax revenue.
ISS - Service Tax
A tax under municipal jurisdiction (Federal Constitution, art. 156, IV), whose taxable event is the provision of services by a company or self-employed professional. The list of services taxable by ISS is listed in Decree-Law No. 406/68. The tax base is the price of the service, under the terms of art. 9 of Decree-Law No. 406/68. Since the taxable event is the provision of the service and the tax base is its price, the possibility of levying tax on potential activity is excluded; that is, the effectiveness of the service provision is an essential requirement. The taxpayer is the service provider, which can only be a company or a self-employed professional.
The innovation regarding this tax is precisely Supplementary Law No. 100, of 12/27/1999, which included tolls in the list of services. In other words, those Municipalities crossed by toll roads began to be able to collect ISS from highway concession companies, with a maximum rate of 5% on their revenue, proportional to the length of the road in their territory. 40% of the total tax is reserved for the Municipality where the toll collection plaza is located. Due to the Law's enactment occurring very close to the end of the 1999 fiscal year, most Municipalities were unable to establish local law for tax collection. Therefore, as the principle of anteriority applies to the collection of this tax, most Municipalities only effectively started collecting the tax from 2001 onwards.
IRRF - Income Tax Withholding
Although it is a tax under the jurisdiction of the Union and regardless of the portion that makes up the FPM (Municipal Participation Fund), the Income Tax levied on income paid under any title by the direct administration belongs to the Municipality, with its withholding by the paying source being mandatory and extended to its autonomous agencies and foundations established and maintained by the Municipality (Federal Constitution, art. 153, paragraph 2, II).
ITBI - Tax on the Transfer of Real Estate
A tax under municipal jurisdiction (Federal Constitution, art. 156, II), whose taxable event is the inter vivos transfer of real estate property, through an onerous act, whether the property is by nature or physical accession, as well as real rights, except for security rights (pledge, antichresis, mortgage), covering the assignment of real rights.
The tax base must be defined in municipal legislation. The taxpayer will also be defined by municipal law and may be either the acquirer or the transferor. Excluded from this tax are "the transfer of assets or rights incorporated into the assets of a legal entity in the realization of capital" and the "transfer of assets or rights resulting from the merger, incorporation, spin-off, or extinction of a legal entity, unless, in these cases, the predominant activity of the acquirer is the purchase and sale of these assets or rights, leasing of real estate, or financial leasing" (art. 156, paragraph 2, I).
Source of this text: http://www.cnm.org.br/institucional/documento.asp?iId=31551
