Politics · Brazil · 9 hrs ago
São Paulo court suspends rulings on new taxes in ICMS calculations
São Paulo’s state court temporarily suspended 10 rulings that had let taxpayers leave two new taxes out of the calculation base for ICMS, a state tax on goods and services.
The taxes, CBS and IBS, are due to begin being collected in 2027 as part of Brazil’s tax reform.
The state government argued that the taxes should be included in the ICMS calculation and that allowing their exclusion could sharply reduce public revenue.
It estimated the position could cost São Paulo R$10.2 billion in state revenue and reduce transfers to its 645 municipalities by R$2.6 billion in 2027.
The court’s president said the suspension was provisional and does not settle the legal dispute over how the tax base should be calculated.
More than 60 taxpayer cases are seeking the exclusion, and the issue is also being debated in Congress; the dispute awaits a final decision by the courts.
São Paulo’s state court suspended 10 rulings that had allowed companies to exclude new taxes on goods and services from the calculation base for the state ICMS tax.
The provisional decision was obtained by the São Paulo state attorney general’s office on Monday, November 9.
The ruling was issued by Francisco Eduardo Loureiro, president of the São Paulo Court of Justice.
The state estimates that allowing the exclusion could reduce its 2027 revenue by R$10.2 billion, and municipal revenue by R$2.6 billion.
The CBS and IBS taxes are due to begin being charged in 2027 as part of Brazil’s tax reform.
- Who
- The São Paulo Court of Justice suspended the rulings, following a request by the São Paulo state attorney general’s office.
- What
- It suspended 10 rulings that allowed CBS and IBS to be excluded from the ICMS calculation base.
- When
- The provisional decision was issued on Monday, November 9, 2026.
- Where
- São Paulo state, Brazil.
- Why
- The state argued that the rulings could cause serious harm to public finances and that the tax calculation base includes the value of the transaction.
São Paulo state government
Taxpayers seeking to exclude CBS and IBS
Calculation of ICMS
São Paulo state government
The state says the calculation base is the transaction value, which includes CBS and IBS.
Taxpayers seeking to exclude CBS and IBS
They seek to exclude CBS and IBS from the calculation base.
Potential impact
São Paulo state government
The state estimates the proposed exclusion could reduce its revenue by R$10.2 billion in 2027 and municipal revenue by R$2.6 billion.
Taxpayers seeking to exclude CBS and IBS
Not stated in the article.
An attempt to bar the new taxes from the ICMS and ISS calculation bases was removed from the final text.
The São Paulo state attorney general’s office obtained a provisional decision suspending 10 rulings.
CBS and IBS are due to begin being charged, replacing PIS and Cofins.
- Rulings suspended
- 10
- Estimated São Paulo revenue reduction
- R$10.2 billion in 2027
- Estimated reduction for São Paulo municipalities
- R$2.6 billion
- Municipalities affected
- 645
- Cases supporting exclusion
- More than 60 mandados de segurança
- Taxes
- CBS and IBS are due to replace PIS and Cofins from 2027
What people are saying
This reading undoubtedly reinforces the legal plausibility of the state’s position, without allowing a definitive conclusion about the scope of the constitutional provisions.
Preserving the effectiveness of the challenged decisions could have significant revenue effects before the tax dispute is definitively considered by the competent courts.