- Brazil’s Federal Senate has approved a tax reform bill involving federal, state, and municipal indirect taxes.
- The bill includes changes to the version adopted by the lower house of parliament.
- The reform would introduce a dual value added tax (VAT) regime.
- It would replace the state VAT and municipal tax on services with a tax on goods and services (IBS).
- It would also substitute federal contributions and excise tax with a contribution on goods and services (CBS).
- The reform would be implemented over a seven-year transitional period starting in 2026.
- The rates for CBS and IBS would gradually increase, while ICMS and ISS would gradually decrease.
- Full implementation of the regime is proposed to happen from 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.
