TCU Approves CBS Rate Calculation at 11.3%; Senate to Set Final Rate

Brazil's Federal Court of Accounts (TCU) approved the calculation of the reference rate for the Contribution on Goods and Services (CBS), a federal tax provided for under the Tax Reform to replace PIS/Pasep and Cofins. The calculated percentage was 11.3468%, rounded to 11.3%. The result was sent to the Federal Senate, the body responsible for setting the definitive rate through a resolution, with a deadline of December 15.

According to Agência iNFRA, this was the first time the TCU performed this type of calculation to serve as the basis for setting the rate of a federal tax, a responsibility established under the tax reform approved in 2023. The court also set at 44.16% the reduction factor applicable to purchases made by direct public administration, government agencies and public foundations, according to Mundo Logística.

Motiva described the proposed rate as higher than expected. The company's CFO, Rodrigo Araujo, noted that the figure represents a potential increase in the tax burden on the economy that could affect economic growth, although he said the company is prepared, with more than 80% of its portfolio reasonably shielded in terms of mitigation band and marginal cash flow. Araujo also warned that, with just two months to go before the reform takes effect, the level of readiness across the supply chain remains very low.

Agência iNFRA reported that the announcement of the rate, which came in above the market's expectation of around 9%, raised new concerns in regulated sectors such as transportation and sanitation. In the sanitation sector, where an average tariff impact of 18% is estimated, Abcon warned that, without a contractual rebalancing, operators' cash flow could be put at risk. In the transportation sector, the main concern is how the economic-financial rebalancing of road concessions will be carried out, while ANTT and Artesp keep their proposals for precautionary rebalancing open for public consultation.

The CBS will begin being charged on a trial basis in 2027 and will gradually replace PIS/Pasep and Cofins during the transition to the new system, which will run until 2033, when the new consumption taxation model will come fully into force. The CBS will be part of the new consumption tax framework together with the Tax on Goods and Services (IBS), which falls under the shared jurisdiction of states and municipalities.