CBS (Contribution on Goods and Services) is the new federal consumption tax created by the Tax Reform to replace PIS, COFINS and IPI. It has a reference rate of approximately 8.8%, with full effect on January 1, 2027. Unlike the current PIS/COFINS (with cumulative and non-cumulative regimes plus dozens of special regimes), CBS adopts full non-cumulativity and a single regime — removing complexity that has been in place since 2002.
What CBS replaces
CBS replaces three federal consumption taxes:
- PIS (Social Integration Program) — currently 0.65% (cumulative) or 1.65% (non-cumulative)
- COFINS (Contribution for Social Security Financing) — currently 3% (cumulative) or 7.6% (non-cumulative)
- IPI (Tax on Industrialized Products) — currently variable rates by NCM code
With CBS, these three levies are unified. Importantly, IPI will continue to exist residually for products of the Manaus Free Trade Zone (until 2033) and for the Selective Tax (which partially replaces the regulatory function of IPI).
Reference rate ~8.8%
The projected reference rate for CBS is approximately 8.8%. It is lower than the current combined burden of PIS+COFINS+IPI (which can reach 15-20% in some sectors), because the subnational IBS of ~18.7% is also factored into maintaining federal revenue.
Combined IBS+CBS: ~27.5% to 28% on consumption — within the parameters designed by Constitutional Amendment 132/2023 to keep total revenue neutral.
The same differentiated regimes as IBS apply:
- Zero rate for the basic food basket and special medicines
- 60% reduction for health, education, public transport
- Cashback for CadÚnico (social registry) families on essential consumption
CBS timeline
- Jan 2026: token CBS of 0.9% (testing phase), PIS/COFINS/IPI at full rates
- Jan 2027: full CBS (~8.8%), end of PIS and COFINS for most sectors
- 2027 onward: residual IPI only for the Manaus Free Trade Zone until 2033
Important: full CBS takes effect 2 years before IBS (January 2027 vs January 2029). This means that during 2027-2028, companies will have full CBS plus ICMS/ISS still in force — a period of specific accounting complexity.
End of the residual cumulativity of PIS/COFINS
Today, PIS/COFINS has two regimes:
- Cumulative (Presumed Profit, certain activities): 3.65% on revenue, with no right to input credits
- Non-cumulative (general Actual Profit): 9.25% on revenue, with credit on inputs
Practical result: companies under the cumulative regime carry residual cumulative taxation on every purchase they make. CBS removes this distinction — every regime adopts full non-cumulativity. Presumed-Profit companies with a high volume of creditable inputs gain substantially; companies with few creditable inputs (professional services) may see an increased burden.
End of the single-phase regime
Fuels, medicines, cosmetics, auto parts and beverages currently have a single-phase PIS/COFINS regime — the manufacturer/importer pays for the entire chain, and the following links (wholesalers, retailers) resell at a zero rate.
With CBS, the single-phase regime ceases to exist. Each link in the chain pays CBS on what it sells, with a full credit for what it paid. Sectors that are single-phase today will gain operational simplification but a different cash flow — wholesalers and retailers that today buy already taxed at origin will now pay CBS on their own operation.
References and official sources
Free CBS impact assessment
Calculation of your company’s projected effective rate after CBS by revenue line, with identification of pre-CBS opportunities (retroactive PIS/COFINS credits).
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