TCU Sets 11.3% Reference Rate for New Federal Consumption Tax

Overview

• The Tribunal de Contas da União approved a 11.3468% reference alíquota for the Contribuição sobre Bens e Serviços and transmitted that figure to the Senate for a decision with a December 15 deadline.
• If the Senate confirms the TCU number the government will use it as the 2027 CBS reference while annual recalibration rules allow later adjustments but do not guarantee refunds for any higher initial rates.
• Industry groups and experts warned the 11.3% CBS plus projected IBS rates of roughly 19–20% could raise Brazil’s combined VAT to about 31.3%, with retail, services and construction among the sectors most likely to face higher effective taxes.
• Small businesses under Simples Nacional face immediate operational choices set by the CGSN and had a short window to opt to pay CBS and IBS through the Simples DAS or under the regular regime for the Jan–Jun 2027 period, a decision that affects credit use and competitiveness.
• State tax authorities—notably São Paulo—intend to include CBS and IBS in the ICMS base and courts have issued first‑instance rulings favoring taxpayers, creating legal and IT uncertainty for firms that must set billing systems before the 2027 rollout.