Brazil amends its Constitution to replace ICMS, ISS, PIS and COFINS with the IBS and CBS dual VAT
This page records one dated change. For the rules in Brazil as they stand today, see the Brazil guide →
- Jurisdiction
- Brazil
- Tax
- VAT
- Change type
- Rate change
- Status
- In force
- Impact
- Action required
- Announced
- 21 December 2023
- Effective
- 1 January 2026
- Instrument
- BR-CONSTITUTIONAL-AMENDMENT-132-2023
- Authority
- Imprensa Nacional — Diário Oficial da União
- Verified
- Fetched from official source · high confidence
All Brazilian taxpayers liable to ICMS, ISS, PIS or COFINS, and every business supplying goods or services in Brazil.
Review consumption-tax obligations; CBS and IBS are now in a test-year phase. Monitor implementing legislation.
Emenda Constitucional nº 132, promulgated by the Mesas of the Câmara dos Deputados and the Senado Federal on 20 December 2023 and published in the Diário Oficial da União on 21 December 2023 (Seção 1, p. 1), amends the Brazilian Constitution to replace ICMS, ISS, PIS and COFINS with a dual VAT: the Imposto sobre Bens e Serviços (IBS, art. 156-A), shared by states, the Federal District and municipalities, and the federal Contribuição Social sobre Bens e Serviços (CBS, art. 195, V). It also creates the Imposto Seletivo (IS, art. 153, VIII) and the Comitê Gestor do IBS (art. 156-B). Under ADCT art. 125, in 2026 IBS is charged at 0.1% and CBS at 0.9% (offsettable against PIS/COFINS); from 2027 CBS and IS are charged and PIS/COFINS extinguished (art. 126); ICMS and ISS are extinguished from 2033 (art. 129).
What changed in detail
Emenda Constitucional nº 132, promulgated by the Mesas of the Câmara dos Deputados and the Senado Federal on 20 December 2023 and published in the Diário Oficial da União on 21 December 2023, amends Brazil’s national tax system in the Federal Constitution.
It creates a dual value-added tax to replace ICMS, ISS, PIS and COFINS:
- the Imposto sobre Bens e Serviços (IBS), art. 156-A, shared by the states, the Federal District and the municipalities, administered through the Comitê Gestor do IBS (art. 156-B);
- the federal Contribuição Social sobre Bens e Serviços (CBS), art. 195, V.
It also creates the Imposto Seletivo (IS), art. 153, VIII.
The transition is set in the ADCT (transitional provisions). Under art. 125, in 2026 the IBS is charged at a state rate of 0.1% and the CBS at 0.9%, with the amount collected offset against PIS and COFINS. From 2027 the CBS and IS are charged and PIS and COFINS are extinguished (art. 126). ICMS and ISS are extinguished from 2033 (art. 129).
What it means
EC 132 is the constitutional frame, and it is still in force; it did not itself make anyone pay IBS or CBS. That came with the implementing law, Lei Complementar 214/2025 (br-lc-214-ibs-cbs-is-2025), which restated the 2026 test rates and built the rules underneath them. As of November 2026 Brazil is in the 2026 test year the amendment set up. The dates that matter next are in the amendment itself: CBS replacing PIS/COFINS from 2027, and ICMS and ISS ending in 2033.
Proof
Art. 125. Em 2026, o imposto previsto no art. 156-A será cobrado à alíquota estadual de 0,1% (um décimo por cento), e a contribuição prevista no art. 195, V, ambos da Constituição Federal , será cobrada à alíquota de 0,9% (nove décimos por cento).Art. 125. In 2026, the tax provided for in art. 156-A shall be charged at the state rate of 0.1% (one tenth of one percent), and the contribution provided for in art. 195, V, both of the Federal Constitution, shall be charged at the rate of 0.9% (nine tenths of one percent).
Source snapshot of the official page. Open full size ↗Archived from the official distribution · Emenda Constitucional nº 132, de 20 de dezembro de 2023 — Senado Federal, Legislação (publicação) · legis.senado.leg.br