Brazil: Federal Court of Accounts approves 11.3% reference rate for CBS
The 11.3% CBS reference rate for 2027 now goes to the Federal Senate for approval.
Brazil's Federal Court of Accounts (Tribunal de Contas da União, TCU) on October 28, 2026, approved the reference rate calculation for the CBS (Contribuição sobre Bens e Serviços), setting it at 11.3% for 2027. The CBS is the federal VAT that replaces PIS and COFINS as of January 1, 2027. The rate now goes to the Federal Senate for approval.
Background
Constitutional Amendment 132/2023, promulgated on December 20, 2023, restructures Brazil's consumption taxes. It replaces PIS, COFINS, ICMS, and ISS with a dual VAT: the federal CBS and the state and municipal IBS (Imposto sobre Bens e Serviços). It also creates a elective Tax (Imposto Seletivo, IS) on goods and services harmful to health or the environment. Complementary Law 214/2025, published on January 16, 2025, sets the operational rules, including the structure, rates, credit mechanics and transition schedule. The new taxes are broad-based, non-cumulative VATs charged at destination.
The transition runs from 2026 to 2033, and the old and new taxes coexist during that period. 2026 is a test year, with the CBS at 0.9% and the IBS at 0.1%. The CBS takes effect in full in 2027, while the IBS is phased in through 2033.
Under Complementary Law 214/2025, the reference rate must preserve the revenue from the taxes being replaced. The more differentiated regimes, reductions, cashback, and presumed credits there are, the higher the rate needs to be. The Federal Revenue Service sent its calculation methodology to the TCU on September 14, 2026, and the TCU Plenary approved the resulting rate on October 28, 2026.
Next steps
- By October 30, 2026: The TCU sends the result to the Senate.
- By December 15, 2026: The Senate sets the rate by resolution.
- January 1, 2027: The CBS starts being charged.
If the Senate does not adopt a resolution by the deadline, the rate calculated by the TCU applies provisionally. A rate approved later takes effect only from the second month after approval.
Annual review
The calculation is repeated every year during the transition. In 2033, the sum of the CBS and IBS reference rates may not exceed 26.5%.
KPMG observation
Because the CBS rate is expected to be fixed before the January 1, 2027 start date, businesses may need to confirm that their ERP, invoicing, and tax calculation engines can apply the new rate by then.
Contact us
For more information, contact a KPMG tax professional:
Bruna Felizardo | brunafelizardo@kpmg.com.br
Philippe Stephanny | philippestephanny@kpmg.com