Brazilian Lawmakers Approve Landmark VAT Legislation, Phasing Out Existing Taxes by 2033

• Brazilian lawmakers have approved legislation for the introduction of new federal and state-level value-added taxes.
• The legislation establishes a federal value-added tax called CBS and a state-level VAT called IBS.
• The new VAT regime will phase out social security contributions PIS and Cofins.
• Rates for the levies will be established in further legislation and will be phased in over several years.
• The IBS and a new “selective tax” will replace the tax on industrialized goods, IPI, as well as the state sales tax ICMS and the municipal services tax ISS.
• Certain industry sectors will receive a 60% reduction in the levies, including education and health services, medicines and medical equipment, public passenger transport, agricultural inputs, artistic and cultural productions, and food production for human consumption.
• The IBS and CBS levies will be introduced in 2026, replacing PIS/Cofins in 2027.
• The ICMS and ISS levies will be phased out starting in 2029, with a 10 percentage point reduction applied for four years until they are abolished in 2033.

Source: answerconnect.cch.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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