🇧🇷 Tax16 Jan 2025
Brazil enacts the rules for its new consumption taxes, with a 2026 test year
Brazil's Complementary Law no. 214 of 16 January 2025 sets the rules for the new dual VAT: the federal contribution on goods and services (CBS) and the state and municipal tax on goods and services (IBS). In 2026 they are charged at test rates of 0.9% and 0.1%, offset against existing taxes, and companies must show them separately on electronic invoices. The old taxes are phased out over the following years.
Complementary Law no. 214 of 16 January 2025 implements Constitutional Amendment no. 132 of 2023, which reformed Brazil's consumption taxes.
What changed
- The CBS (federal) and the IBS (states and municipalities) will replace PIS, Cofins, IPI, ICMS and ISS over a transition period.
- 2026 is a test year: CBS at 0.9% and IBS at 0.1%. Amounts declared can be offset against PIS and Cofins, so the net cost is meant to be zero.
- From 1 January 2026, electronic tax documents must show CBS and IBS separately for each transaction.
- Simples Nacional taxpayers are outside the 2026 test rates.
- From 2027 the CBS moves to its reference rate and PIS and Cofins end.
Who is affected
Brazilian companies and their finance, tax and systems teams.