- Brazil is replacing five complex consumption taxes with a unified dual VAT system (CBS and IBS) and a Selective Tax on harmful goods.
- The reform adopts the destination principle, zero-rates exports, harmonises rates nationally, and provides reduced or zero rates for key sectors and essential foods.
- It introduces a non-cumulative VAT, a central IBS committee for credit/revenue management, and a split-payment mechanism for compliance and real-time reporting.
- Equity measures include VAT cashback for low-income households and continued support for Simples Nacional; a six-year transition ensures revenue stability.
- The reform aims to reduce compliance costs by over 60%, improve neutrality, and modernise Brazil’s VAT system, setting a new global benchmark.
Source: fiscal-requirements.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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