The Federal Audit Court (TCU) approved, this Wednesday, the reference rate of 11.3% for the Contribution on Goods and Services (CBS), a federal tax that will replace PIS/Pasep and Cofins within the scope of tax reform. The percentage will be sent to the Federal Senate, responsible for setting the rate through resolution. If there is no definition within the legal deadline, the percentage calculated by the Court will prevail.

     The index surpasses previous estimates and reignites the debate about the tax burden of the new consumption taxation model. As a result, the total Brazilian VAT rate, made up of the CBS and the Tax on Goods and Services (IBS), could reach 29%, although this scenario depends on other factors and does not represent a definitive definition.

     The CBS will begin to be required in 2027, subject to the specific rules of the transition, which will last until 2033. During this period, the gradual replacement of current taxes will require attention to the calculation rules, the appropriation of credits and the adjustments necessary to implement the new system.

     For companies, the definition of the reference rate reinforces the importance of evaluating the possible impacts of the reform on costs, price formation, contracts and financial planning. The analysis must consider the particularities of each economic activity, especially because the effective tax burden will depend not only on the applicable rates, but also on the credit system and the specific rules of each operation.

     Following regulations and anticipating the effects of the transition will be essential for taxpayers to adapt their tax and financial processes to the new model, with greater predictability and legal certainty.

By Matheus Gehring - Head of Tax Area