TCU Sets 11.3% Reference Rate for Brazil’s New CBS

Overview

• The Tribunal de Contas da União calculated a reference alíquota of 11.3468%, rounded to 11.3%, for the Contribuição sobre Bens e Serviços and forwarded that calculation to the Senate for resolution.
• The Senate has the legal authority to fix the reference rate by resolution before the transition starts, and provisional mechanisms exist if lawmakers do not decide in time.
• Businesses and industry groups warned the 11.3% standard rate surpasses prior government and private estimates and could raise operating costs and consumer prices in sectors that receive no special reductions.
• How much taxpayers will actually pay depends on still-undecided elements such as the final design and receipts of the Imposto Seletivo, the eventual IBS profile, sectoral exceptions like zero rates for basic food and reductions for health and education, and the size of the compliance gap.
• Architect Bernard Appy said the TCU number is slightly higher than he expected but stressed the law allows annual recalibration once real revenue data and selective-tax receipts are known, while experts warn past over-collection would not automatically be refunded to taxpayers.