- Brazil passed Supplementary Law No. 214 2025 on January 16 2025, marking a significant step in tax reform.
- The law outlines the framework for the IBS, CBS, and IS, and establishes the IBS Management Committee.
- The initial tax rate will be approximately 28 percent, with specific rates to be determined by subsequent legislation.
- The transition to the new system will occur gradually between 2026 and 2033.
- Reference rates for CBS and IBS will be set by the Federal Senate during the transition period.
- Starting in 2033, these rates will be calculated based on tax collections from 2026 to 2030 and capped at 26.5 percent.
- The law provides for reduced rates on certain essential goods and services, ranging from zero to 60 percent.
- Key areas benefiting from these reductions include food, healthcare, education, real estate, freelance professions, and cultural productions.
- Tax benefits for the Manaus Free Trade Zone will continue.
- Basic food products will benefit from reduced rates.
- There will be a cashback program for low-income individuals and special conditions for app-based transport drivers.
Source: jdsupra.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.
