TCU announces 11.3% CBS reference rate for 2027: what it means for businesses

On 28 October 2026, the plenary of Brazil’s Federal Court of Accounts (TCU) approved the calculation of the reference rate for the Contribution on Goods and Services (CBS) for 2027: 11.3%. The figure exceeds the rate of around 9% previously projected for the contribution.

The calculation now goes to the Federal Senate, which has until 15 December 2026 to set the rate by resolution. Until then, the proposed figure may be confirmed or adjusted.

The rationale: maintaining current federal tax revenue

The rate is calibrated so that CBS generates the same revenue as the federal taxes it replaces (PIS, Cofins, IPI and IOF on insurance, pursuant to Article 350(I) of Complementary Law No. 214/2025), without increasing or reducing the overall tax burden across the economy.

However, this revenue neutrality still depends on unresolved variables. The rates of the Selective Tax, which will offset part of the revenue currently generated by IPI, have yet to be set through the required ordinary legislation. The executive act specifying which products associated with the Manaus Free Trade Zone will remain subject to IPI from 2027 has also yet to be published. As both affect the revenue that CBS must replace, the Senate will need to consider these factors when confirming or adjusting the rate proposed by the TCU.

Why should the 11.3% rate be assessed beyond its headline figure?

Comparing 11.3% with the 9.25% PIS/Cofins rate can lead to misleading conclusions because the new regime changes the basis of calculation. PIS and Cofins are calculated on a tax-inclusive basis, meaning that the taxes form part of their own assessment base. They also operate under two models: the cumulative regime, with a lower rate and no tax credits, and the non-cumulative regime, with a higher rate and restricted credits. CBS is calculated on a tax-exclusive basis and provides for full input tax credits: as a general rule, all CBS paid on purchases gives rise to a credit.

In practice, a tax-inclusive rate of 9.25% is equivalent to approximately 10.19% on a tax-exclusive basis. On a comparable basis, the nominal gap of more than two percentage points therefore falls to just over one percentage point. Broader access to tax credits may or may not offset this difference, depending on the circumstances.

The actual impact depends on each business

The net effect will vary according to the company’s current PIS/Cofins regime, its position in the supply chain, and its cost and pricing structure. Some businesses will see their tax burden fall; others will need to review prices and contracts to preserve margins.

With the rate proposed by the TCU, this assessment no longer needs to rely on hypothetical rates and can be carried out with precision before January 2027.

BVA’s tax team is available to model the impact of CBS on your business and support the necessary adjustments to pricing, contracts and tax credit management for 2027.