Brazil’s Chamber of Deputies approves indirect tax reform bill, introducing dual VAT regime.

• Brazil’s Chamber of Deputies has approved a tax reform bill involving federal, state, and municipal indirect taxes.
• The reform will introduce a dual value added tax (VAT) regime.
• The tax on goods and services (IBS) will replace the state VAT (ICMS) and the municipal tax on services (ISS).
• The contribution on goods and services (CBS) will substitute the federal PIS/COFINS contributions and the federal excise tax on manufactured products (IPI).
• The reform will be implemented over a transitional period of seven years, starting in 2026.
• The CBS will be introduced at a rate of 0.9% and the IBS at a rate of 0.1%, gradually increasing over time.
• The PIS, COFINS, ICMS, and ISS will be gradually reduced and eventually terminated.
• Full implementation of the new regime is expected to occur in 2033.

Source: kpmg.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.