Business · Economy · 2 hrs ago
TCU approves 11.3% rate for Brazil’s new federal tax in 2027
Brazil’s audit court approved an 11.3% rate for the CBS tax for 2027, rounding a more precise figure of 11.34%.
The CBS is a new federal tax on goods and services created under Brazil’s consumption tax reform.
It will replace PIS and Cofins and most of the federal industrial products tax, while a separate tax will cover some goods and services harmful to health or the environment.
The reform is intended to simplify the tax system while keeping overall tax collection from rising.
The proposed CBS rate is higher than earlier government estimates, including a 9.21% estimate after lawmakers expanded tax benefits.
The São Paulo state industry federation says the rate could take more than 100 billion reais from the economy in extra taxes and wants the Senate to lower it.
The Senate has until December 15 to decide the rate; if it does not act by then, the TCU’s figure will apply for 2027.
Brazil’s Federal Court of Accounts approved a proposed 11.34% reference rate for the new federal CBS contribution in 2027, rounded to 11.3% in some reports.
The proposal is intended to preserve revenue from taxes being replaced, but the São Paulo State Federation of Industries says the rate is too high and could increase the tax burden.
The Senate has until December 15 to set the rate; if it does not, the court’s calculation will apply.
The CBS is part of Brazil’s tax reform and will replace federal taxes including PIS and Cofins.
- Who
- Brazil’s Federal Court of Accounts proposed the rate. The Senate will make the final decision.
- What
- A reference rate of 11.34% for the CBS in 2027 was approved by the court.
- When
- October 28, 2026. The Senate has until December 15 to set the rate.
- Where
- Brazil.
- Why
- The court says its calculation aims to preserve revenue from the taxes being replaced without increasing or reducing public revenue.
Federal Court of Accounts
São Paulo State Federation of Industries
Purpose of the rate
Federal Court of Accounts
The calculation aims to preserve revenue from replaced taxes without increasing or reducing public revenue.
São Paulo State Federation of Industries
The proposed rate is higher than needed to preserve the tax burden.
Appropriate rate
Federal Court of Accounts
The court approved a 11.34% reference rate for 2027.
São Paulo State Federation of Industries
The federation says technical studies pointed to a rate near 9% and asks the Senate to revise the calculation.
Potential impact
Federal Court of Accounts
The court’s stated aim is to maintain revenue from the replaced taxes.
São Paulo State Federation of Industries
The federation estimates more than R$100 billion in additional taxes could be taken from the economy in 2027, harming production, investment and employment.
The Finance Ministry estimated a CBS rate of 8.8% as part of a projected 26.5% combined rate for the CBS and IBS.
The IBS managing committee estimated a CBS reference rate of 9.21%.
The Federal Court of Accounts approved the proposed 11.34% CBS reference rate for 2027.
Deadline for the Senate to set the rate; otherwise, the court’s calculation will apply.
- Proposed CBS rate
- 11.34% (rounded to 11.3%)
- Year covered
- 2027
- Senate deadline
- December 15
- Fiesp’s estimated additional tax impact
- More than R$100 billion in 2027
- Government revenue estimate
- R$636.8 billion from the CBS in 2027
5 sources
O nó górdio das contas públicas brasileiras
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What people are saying
We hope the Senate will use common sense to correct this distortion.
The expectation was for a lower rate. But this rate for 2027 is the least precise during the transition, which runs until 2033. It will be calibrated and the trend is for it to fall.
The government’s estimate was that the CBS would have a rate of 9.21% and it ended up at 11.34%. If the IBS increases in the same proportion, we could have a VAT of 34.2%. It will be much higher than the second-highest, which has a VAT of 26%.