Resumo Legal – #4 Tax Reform Special

The second half of October was marked by the Brazilian Federal Court of Accounts (TCU) releasing its calculation of the 2027 reference rate for the federal Contribution on Goods and Services (CBS), at 11.3%. The figure exceeded earlier projections and prompted debate over the methodology, which is expected to continue in the Federal Senate.

Updated technical specifications for electronic tax documents were also approved. On November 4, the government published Provisional Measure No. 1,399/2026, setting the 2027 rates for the Excise Tax (Imposto Seletivo).

This edition also examines the Paraná State Treasury’s position on including the IBS (the new state and municipal Tax on Goods and Services) and the CBS in the ICMS tax base (the state tax on goods and certain services). This position follows the interpretation adopted by São Paulo’s tax authorities but contrasts with the first court decisions in favor of taxpayers.

Below, we highlight the period’s main developments, including updates through November 5, 2026, and their potential implications for taxpayers.

TCU calculates the 2027 CBS reference rate at 11.3%

Case TC 006.529/2026-7, extraordinary plenary session of October 28, 2026, and Article 349 of Complementary Law No. 214/2025

At its extraordinary plenary session on October 28, the TCU approved a calculated CBS reference rate of 11.3468% for 2027, rounded to 11.3% under Article 349, § 14, of Complementary Law No. 214/2025. It also calculated a 44.16% reduction factor for CBS and IBS rates on transactions contracted by the direct public administration, autonomous government entities and public foundations.

As provided in the Constitution, the CBS reference rate is intended to preserve federal revenue from the taxes it will replace, taking into account reduced rates, special and preferential regimes, Simples Nacional, tax refund mechanisms and input tax credits. The TCU reviewed the 17 modules used in the calculation and considered, among other factors, the expected narrowing of the tax gap, using the average of data for 2023 and 2024 as a reference.

The resulting rate exceeded earlier estimates, including the 9.21% CBS rate used by the IBS Management Committee (CGIBS), raising questions about the assumptions underlying the calculation and its potential impact on the tax burden.

The Federation of Industries of the State of São Paulo (Fiesp) called on the Federal Senate to review the calculation, arguing that the rate would be inconsistent with the commitment to preserve the overall tax burden. In a public statement, Fiesp estimated an impact of more than BRL 100 billion in 2027 and warned that the combined CBS and IBS rate could exceed 30%.

The issue reached the Senate’s Economic Affairs Committee (CAE), which approved a public hearing on November 3 to discuss the proposed reference rate. Senator Eduardo Braga, the rapporteur on the matter, said the figure had surprised lawmakers and called for closer examination of the calculations before the rate is set.

The Federal Senate must set the CBS reference rate for 2027 by resolution no later than December 15, 2026, under the exceptional deadline provided for in Articles 349, § 1, II, and 353, § 2, of Complementary Law No. 214/2025.

Impact. Although the Senate has yet to decide, the 11.3% rate calculated by the TCU provides an important benchmark for companies’ 2027 tax planning. It should not be treated as final until the Senate completes the statutory process.

New technical notes update electronic tax documents for the IBS and the CBS

Joint Technical Act RFB/SUFIS/CGIBS/Executive Board No. 10, of October 28, 2026, published in the Federal Official Gazette (DOU) on October 29, 2026

Under Joint Technical Act No. 10/2026, the Brazilian Federal Revenue Service and the IBS Management Committee (CGIBS) approved updated technical specifications for electronic tax documents under the tax reform. These cover, among others, the NF-e, NFC-e, CT-e, NFCom, BP-e, NF3e, NFAg, NFGas and Electronic Invoice for the Disposal of Real Estate (NF-e ABI).

For NF-e and NFC-e (electronic invoices for goods and retail transactions), the act approved version 1.53 of Technical Note 2025.002 and four additional technical notes. These address Simples Nacional (NT 2026.005), issuance by taxpayers subject exclusively to IBS and CBS without a state tax registration (NT 2026.007), and new fields to report the net value of products (NT 2026.008). The IBS and CBS tax classification table (cClassTrib) was also updated to version 1.71.

Of particular note is NT 2026.006, which establishes rules for linking electronic tax documents to payment transactions. It adds fields for payment transactions generated before issuance and a specific event for those linked after authorization. These changes prepare systems for the gradual implementation of split payment, subject to the applicable timetable and regulations.

The updates were nevertheless released just over two months before CBS collection is scheduled to begin, leaving companies less time to adapt their systems and perform the necessary tests. Taxpayers should therefore monitor not only the technical specifications but also the implementation dates and validation rules for each document type.

Impact. Companies will need to review their tax and enterprise management systems, particularly tax classification, reporting of net product values and links between payments and tax documents. Given the approaching start of CBS collection, adjustments should follow the implementation timetable and validation rules for each document, with testing to reduce issuance errors.

Provisional Measure No. 1,399/2026 sets the 2027 Excise Tax rates, scheduled to take effect in February

Provisional Measure No. 1,399, of November 4, 2026 (DOU of November 4, 2026, extra edition B), and Article 62, § 2, of the Federal Constitution

Published in a special edition of the Federal Official Gazette on November 4, Provisional Measure No. 1,399/2026 establishes the rates and supplementary rules applicable to the Excise Tax for calendar year 2027, with effects beginning on February 2, 2027.

The provisional measure adopts a Gradual Implementation Regime. For vehicles, aircraft, vessels, smoking products, and alcoholic and sugar-sweetened beverages, Excise Tax rates are calculated by multiplying the initial rates by the conversion factors specified in the measure.

In general, the initial rates correspond to those in the IPI Rate Schedule (TIPI) in force on the measure’s publication date. For vehicles, the starting point is a base rate adjusted for sustainability criteria, including energy source, energy efficiency, power output and recyclability.

The main rates set for 2027 include:

Source: Provisional Measure No. 1,399/2026, Articles 3 to 7 and Annexes I to V. The rates are subject to the tax classifications, adjustments and specific conditions set out in the provisional measure.

The regime is transitional, and the Executive Branch must submit to Congress, by May 31, 2027, a bill setting the rates to apply from 2028.

The provisional measure also governs Federal Revenue Service-assisted calculation of Excise Tax, methods for settling tax liabilities—including split payment—and the rules applicable to imports. It further provides that expected Excise Tax revenue will be taken into account when calculating the 2027 CBS reference rate, so as to reduce that rate.

Separately, on November 4 the government submitted to Congress a proposed constitutional amendment (PEC) which, according to the information released, would temporarily extend the IPI on products affected by the Excise Tax until the new tax takes full effect, to avoid a gap in tax revenue. The proposal still requires legislative approval.

Article 62, § 2, of the Federal Constitution also warrants attention. Under that provision, a provisional measure establishing or increasing taxes, other than those expressly excepted, will produce effects in the following fiscal year only if converted into law by the end of the year in which it was issued. Whether this requirement applies to the initial Excise Tax rates may become a matter of dispute, making the measure’s progress through Congress particularly important to monitor.

Impact. The rates and scheduled February 2027 effective date allow businesses in the affected sectors to assess the implications for prices, contracts and tax systems. The tax treatment applicable at the start of 2027 will nevertheless remain subject to developments in Congress concerning both the provisional measure and the proposed temporary extension of the IPI.

Paraná tax authorities support including IBS and CBS in the ICMS tax base

SEFA/PR Tax Ruling No. 48, of August 18, 2026, Sefaz/SP Tax Ruling No. 33,083/2026, Article 13 of Complementary Law No. 87/1996 and STJ Repetitive Appeal Topic No. 1,223

In the previous edition, we discussed a judgment by the 2nd Public Treasury Court of Santos excluding IBS and CBS from the ICMS tax base. By contrast, in Tax Ruling No. 48/2026, the Paraná State Treasury took the view that the new taxes—including the Excise Tax, where applicable—must be included in the ICMS tax base during the transition period unless expressly excluded by law.

The Paraná tax authorities based their position on Article 155, § 2, XII, ‘i’, of the Federal Constitution and Article 13 of Complementary Law No. 87/1996, under which ICMS is calculated on the transaction value, including the tax itself. They also cited STJ Repetitive Appeals Topic No. 1,223, which upheld the inclusion of PIS and Cofins in the ICMS tax base where that base corresponds to the transaction value.

The ruling also details the calculation method adopted by the Paraná tax authorities. Because ICMS is excluded from the IBS and CBS tax bases until December 31, 2032, the new taxes are to be calculated on a tax-exclusive basis, taking into account the Excise Tax where applicable. Those amounts are then included with the price of the goods in the tax-inclusive (‘por dentro’) calculation of ICMS, without being added again to the final transaction value.

This interpretation is consistent with the position already taken by the São Paulo State Treasury in Tax Ruling No. 33,083/2026, which likewise treats IBS and CBS as part of the transaction value for ICMS purposes once they become effectively payable. For 2026, however, São Paulo’s tax authorities consider that the new taxes do not result in an effective increase in the tax burden during the testing period.

In contrast, the 16th Public Treasury Court of São Paulo issued a separate judgment in favor of taxpayers in Writ of Mandamus No. 1138866-98.2026.8.26.0053, brought by Privalia Brasil S.A.

The court upheld its earlier preliminary injunction and recognized Privalia’s right to calculate ICMS from 2027 without including IBS and CBS in its tax base. It found no statutory basis for inclusion, noting that Complementary Law No. 227/2026 expressly added only the Excise Tax to the ICMS tax base. The judgment is subject to mandatory appellate review by the São Paulo Court of Justice.

Impact. Inclusion of IBS and CBS in the ICMS tax base is likely to prompt administrative and judicial disputes, given the conflicting interpretations and the potential increase in the tax burden from 2027 during the transition. Companies should assess the financial implications and whether to seek preventive judicial relief.

On the Radar

This biweekly newsletter is published by the tax practice of SouzaOkawa Advogados and does not constitute legal advice on specific matters. The application of the rules discussed depends on the circumstances of each transaction. Our team is available to clarify how the changes may affect your business.