Brazil Implements New VAT and Selective Tax on Harmful Goods and Services in 2025 Reform

• Brazil’s President signed a new tax law on 16 January 2025.
• The law introduces new taxation frameworks: IBS, CBS, and IS.
• The 2023 reform introduced a VAT and a selective tax on harmful goods and services.
• The selective tax excludes exports, electricity, and telecommunications.
• The selective tax is included in the taxable base for new VATs and during the transition for state and municipal taxes.
• The law will be effective from 1 January 2027.
• The selective tax applies to certain vehicles, vessels, aircraft, smoking products, sugary drinks, alcoholic beverages, mineral goods, and fantasy sports.
• The tax is applied on the first supply, auction sales, mineral extraction, service provision, or imports.
• Taxpayers include manufacturers, importers, auction winners, and service providers.
• Tax rates are based on environmental and performance criteria.
• Vehicles are taxed based on emissions and efficiency.
• Zero-emission vessels and aircraft may get tax reductions.
• Tobacco and alcoholic beverages have dual tax rates.
• Mineral goods have a maximum tax rate of 0.25%.
• Natural gas for industrial or transportation use is taxed at zero.

Source: regfollower.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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