Brazil Senate to define CBS tax rate by December 15

The Brazilian Senate is moving into a critical phase of the tax reform process. The Federal Court of Accounts (TCU) is expected to submit a proposal for the reference rate of the Contribution on Goods and Services (CBS) to the Senate by October 30. The CBS is a federal tax intended to replace PIS/Pasep and Cofins starting in January 2027.

Once the proposal is received, the Senate has until December 15 to establish the rate via resolution. Current unofficial estimates from the IBS Management Committee suggest a rate of 9.21% for the CBS and 18.7% for the Goods and Services Tax (IBS), totaling 27.91%.

Alexandre Andrade, director of the Senate's Independent Fiscal Institution (IFI), noted that the rate must ensure revenue neutrality to replace the taxes being phased out. He warned that maintaining current revenue levels while accounting for approved tax exceptions and differentiated regimes may limit the margin for lower rates without impacting the federal budget.