Brazil’s TCU calculates an 11.3% CBS reference rate for 2027

Summary

• Brazil’s Federal Court of Accounts, the TCU, approved a calculated reference rate of 11.3% for the Contribution on Goods and Services, or CBS, for 2027. CBS is the federal component of Brazil’s dual-VAT reform and will replace PIS and COFINS as the new system moves from testing into substantive implementation.
• The 11.3% figure is not yet the final statutory rate. It will be sent to the Federal Senate, which is responsible for fixing the rate. The TCU states that the calculation is designed to preserve federal revenue neutrality and also calculated a reduction of approximately 44.2% for certain purchases by public administrations.
• Businesses should prepare on the basis that the rate-setting process is nearing completion while retaining flexibility for the Senate’s final decision. Readiness priorities include ERP tax configuration, pricing and contract review, treatment of credits, invoice content, transitional coexistence with legacy taxes and reconciliation between procurement, sales, tax engines and reporting.

Extended article

Brazil has reached another important implementation point in its consumption-tax reform. On 28 October 2026, the Federal Court of Accounts approved a calculated CBS reference rate of 11.3% for 2027. CBS is the federal VAT-style contribution created by the reform and is intended to replace PIS and COFINS as the transition progresses.

The TCU’s role is to validate the calculation needed to preserve federal revenue under the legal methodology. The resulting percentage now goes to the Federal Senate, which has authority to determine the rate. Accordingly, 11.3% should be treated as a formally calculated reference rate rather than an already final statutory percentage. The TCU also calculated a reduction of about 44.2% for specified purchases by direct public administrations, agencies and public foundations.

For companies, the immediate issue is not only the headline rate. CBS changes the underlying tax model, including the credit mechanism and the relationship between tax-exclusive pricing, invoicing, procurement and recovery. A direct comparison with existing PIS/COFINS rates can therefore be misleading without considering the tax base and availability of input credits.

Implementation teams should model the effect by transaction type and legal entity, validate tax-engine rules, and assess whether contracts and price lists can accommodate final rate confirmation. Particular attention is needed for credit eligibility, exemptions and reduced treatments, transitional documents, government customers and reconciliation across the coexistence period. The Senate’s final decision remains the key legal trigger, but systems and data work should already be substantially advanced.

External references: Official TCU announcement  |  KPMG technical analysis  |  Sovos update

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