Tax cashback is the mechanism by which Brazil’s reform returns part of the IBS and CBS to low-income families. Households registered in CadÚnico, with a per-capita income of up to half the minimum wage, get a slice of the tax back — automatically, with no need to apply. On essentials such as electricity and cooking gas, the entire CBS comes back. It is set out in Complementary Law 214/2025 (arts. 112 to 123) and built on the constitutional command of art. 156-A, § 13.
- What it is: a refund (cashback) of part of the IBS and CBS to families in CadÚnico (art. 112).
- How much: essentials return 100% of the CBS and 20% of the IBS; other goods and services return 20% of each (art. 118).
- Who: families in CadÚnico, per-capita income up to half the minimum wage, resident in Brazil, with a regular CPF (art. 113) — enrolled automatically.
- How: CPF on the invoice → assessment by the RFB (CBS) and the IBS Steering Committee (IBS) → refund via a financial agent (arts. 114 to 116).
- When: CBS cashback from 2027; IBS cashback from 2029; full regime in 2033 (art. 123).
Below, the TaxUp team explains each piece, with the exact legal basis and the points that usually go unnoticed — including what it means for businesses. It is the social side of the same reform that reshaped healthcare, agribusiness and education.
What the tax cashback is
Cashback is not an exemption or a reduced rate. The tax is charged normally along the chain — and then part of it is returned to the eligible family. It is a redistributive tool: instead of relieving a product for everyone, the reform charges and gives back to whoever needs it most. The percentage returned depends on the type of good or service:
The design favours essentials: on electricity, water, sewage, piped gas, LPG up to 13 kg and telecom, the family gets back the entire CBS and 20% of the IBS. On everything else (outside the Selective Tax), 20% of each.
Before the reform: two paths that converged
The cashback did not appear from nowhere. It is the meeting point of two earlier movements. On the judicial side, the Supreme Court, in RE 714,139 (Theme 745), capped the ICMS on electricity and telecom to the general rate, recognising these as essential. On the administrative side, the Nota Fiscal Paulista (2007) had already taught Brazilians to ask for the CPF on the invoice in exchange for part of the ICMS back.
The reform merges the two ideas — essentiality and the CPF on the invoice — into a single national mechanism, now targeted by income: the IBS and CBS cashback.
Legal basis
The cashback flows from the constitutional command (art. 156-A, § 13, introduced by Constitutional Amendment 132/2023) and is detailed in LC 214/2025:
| Topic | Legal basis (LC 214/2025) |
|---|---|
| Cashback — general rule and purpose | Art. 112 |
| Beneficiaries (eligibility) | Art. 113 |
| How the refund works | Arts. 114 to 116 |
| Refund percentages | Art. 118 |
| Timeline | Art. 123 |
The refund percentages (art. 118)
Art. 118 sets two bands. For essential items — electricity, water, sewage, piped gas, LPG up to 13 kg and telecom — the family gets back 100% of the CBS and 20% of the IBS. For other goods and services (anything that is not essential and not subject to the Selective Tax), 20% of each tax.
Two of these — electricity and cooking gas — are not optional: the Constitution itself (art. 156-A, § 13) makes their refund mandatory. The Selective Tax (the “sin tax”) stays out of the cashback (art. 117, § 2, I): there is no point taxing tobacco or alcohol more heavily only to give it back.
Who receives the cashback (art. 113)
Eligibility is objective. To receive, the family must meet four requirements:
| Requirement | Detail (art. 113) |
|---|---|
| Registration in CadÚnico | The federal Single Registry for social programmes |
| Income | Per-capita family income of up to half the minimum wage (BRL 810.50 in 2026) |
| Residence | Resident in the national territory |
| CPF | CPF in good standing |
Whoever meets the requirements is enrolled automatically — there is no need to apply — and may request exclusion at any time (art. 113, § 1). It is targeting by income, not by product.
How the refund works (arts. 114 to 116)
The path has four steps: the family buys with the CPF on the invoice (which formalises consumption); the tax is assessed by the Federal Revenue (CBS) and the IBS Steering Committee (IBS); the amount is released to a financial agent within 15 days; and the family receives it within 10 days.
For essential services (electricity, water, sewage, piped gas and telecom), there is a shortcut: the discount already comes on the bill (art. 116, § 1), with no wait for a transfer. And the credit received has a deadline to be used — up to 24 months (art. 114, § 1, VIII).
Timeline (art. 123)
| Year | What happens |
|---|---|
| 2026 | Test year, with token rates |
| 2027 | Full CBS; the CBS cashback begins |
| 2027–2028 | Cashback applies only to the CBS |
| 2029 | The IBS cashback begins |
| 2033 | Full regime: cashback on IBS and CBS in full |
The cashback follows the same transition as the rest of the reform: it starts on the CBS in 2027 and reaches the IBS from 2029.
Points usually missed
On essentials, it is a discount on the bill, not a later refund
For electricity, water, sewage, piped gas and telecom, the relief comes as a discount on the bill itself (art. 116, § 1) — the family does not wait for a transfer. For other purchases, it is a refund after assessment.
The Selective Tax is out
The cashback does not return the Selective Tax (art. 117, § 2, I). Items taxed for being harmful to health or the environment — tobacco, alcohol, sugary drinks — do not generate cashback, by design.
The credit has a deadline
The amount received must be used within 24 months (art. 114, § 1, VIII). It is not an indefinite balance.
It depends on the CPF on the invoice
No CPF on the invoice, no cashback. This is what links the social mechanism to the formalisation of consumption — and it is exactly where business meets the cashback.
What it means for businesses
The cashback is funded by the tax and paid by the State to the family — it is not a cost for the seller. But it changes behaviour at the till: low-income consumers gain a concrete reason to ask for the CPF on the invoice, which pushes formalisation across retail and essential services.
For companies, the practical effects are on systems and process: invoicing must capture the CPF reliably, and essential-service providers (utilities, telecom) must apply the discount on the bill (art. 116, § 1). In the TaxUp team’s view, the cashback is, for business, less a tax line and more a formalisation and compliance matter — one to handle alongside the broader tax-planning agenda.
Common mistakes and risks
- Reading cashback as an exemption. The tax is charged in full; part is returned afterwards (art. 112).
- Thinking everyone receives it. Only families in CadÚnico within the income limit (art. 113).
- Expecting 100% back on everything. The 100% of the CBS is for essentials; the general rule is 20% of each tax (art. 118).
- Ignoring the CPF on the invoice. Without it, there is no cashback — and no formalisation gain.
- Counting on the Selective Tax coming back. It does not (art. 117, § 2, I).
Frequently asked questions
What is the tax cashback?
It is the return of part of the IBS and CBS to low-income families (art. 112 of LC 214/2025). The tax is charged normally and, afterwards, a slice is given back to families registered in CadÚnico within the income limit.
How much of the tax comes back?
On essential items (electricity, water, sewage, piped gas, LPG up to 13 kg and telecom), 100% of the CBS and 20% of the IBS. On other goods and services, 20% of each tax (art. 118). The Selective Tax is excluded.
Who is entitled to the cashback?
Families registered in CadÚnico, with a per-capita income of up to half the minimum wage (BRL 810.50 in 2026), resident in Brazil and with a regular CPF (art. 113). Enrolment is automatic.
How does the family receive it?
By buying with the CPF on the invoice. The tax is assessed by the RFB (CBS) and the IBS Steering Committee (IBS), released to a financial agent within 15 days and transferred to the family within 10 days (arts. 114 to 116). On essential services, the discount comes on the bill.
When does the cashback start?
The CBS cashback begins in 2027; the IBS cashback in 2029; and the full regime in 2033 (art. 123). Between 2027 and 2028 it applies only to the CBS.
Is the cashback a cost for the business?
No. It is funded by the tax and paid by the State to the family. For the company, the relevant point is capturing the CPF on the invoice and, for essential-service providers, applying the discount on the bill.
Does the Selective Tax generate cashback?
No. The Selective Tax is excluded from the cashback (art. 117, § 2, I) — items taxed for being harmful do not generate a refund.
Sources: Complementary Law 214/2025, arts. 112 to 123 (esp. 113, 114–116, 117, § 2, I, and 118); Constitutional Amendment 132/2023, art. 156-A, § 13; STF — RE 714,139 / Theme 745 (ICMS on electricity and telecom; historical section). Minimum-wage figure for 2026 used to illustrate the eligibility cap. Informational content; not a legal opinion.
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