In Brazil’s tax reform, healthcare gets favourable treatment under IBS and CBS, in layers. Health services, medical devices and medicines in general have the rate reduced by 60% — you pay 40% of it. Medicines and devices on specific lists, plus accessibility and menstrual-health items, are zero-rated. And health plans enter a specific regime, with the reference rate cut by 60% and a tax base of their own. The rules are in Complementary Law 214/2025 and apply over the 2026–2033 transition.
- Health services: IBS and CBS rate cut by 60% — you pay 40% (art. 128, II, and art. 130).
- Health plans: specific regime (arts. 234 to 238) — reference rate cut by 60%, a tax base on the operator’s net revenue, and credit barred for those who buy the plan.
- Medicines: zero-rated for listed therapeutic lines (art. 146 — rare diseases, oncology, diabetes, HIV, cardiovascular and others); the rest get a 60% reduction (art. 128, V).
- Charities: non-profit charity hospitals (such as Santas Casas) may be immune (art. 9, III) — but the immunity does not cover their purchases (art. 9, § 4).
- When: full CBS in 2027 and IBS over the 2029–2033 transition.
Below, the TaxUp team details each layer, with the exact legal basis, impact cases by sub-segment and what changes for clinics, hospitals, operators and industry — including what usually escapes attention: the plans’ own regime, the charities’ immunity and telemedicine. It is a sector with a regime of its own, like agribusiness and education.
What changes in healthcare: the overview
The tax reform does not treat healthcare as a single block. Each link — care, plan, medicine, device — has its own rule:
| Category | Treatment | Legal basis (LC 214/2025) |
|---|---|---|
| Health services | 60% reduction (you pay 40% of the rate) | Art. 128, II, and art. 130 |
| Health plans | Specific regime: reference rate cut by 60%, with its own tax base | Arts. 234 to 238 |
| Medical devices | 60% reduction (rule) or zero rate (specific lists) | Art. 128, III, and art. 131; art. 143, I |
| Medicines | 60% reduction (rule) or zero rate (listed therapeutic lines) | Art. 128, V; art. 143, III, and art. 146 |
| Accessibility (PwD) and menstrual health | Zero rate | Art. 143, II and IV |
The underlying read: the sector is broadly relieved, but under different rules. Knowing which layer each operation falls into is what sets the burden — and, for plans, there is a whole regime apart.
Before the reform: ISS, PIS/Cofins and the single-phase regime for medicines
Taxing consumption in healthcare was never simple. Medical and hospital services paid municipal ISS (2% to 5%, item 4 of the list annexed to LC 116/2003), plus PIS and Cofins. Health plans were, for years, the stage of a dispute over the very incidence of ISS: only in 2016, in RE 651,703 (Theme 581), did the Supreme Court hold that health-plan operators provide a service subject to ISS — and, on a clarification appeal, adjusted the thesis to exclude health insurance (which bears IOF, not ISS). An entire sector was arguing, before the Supreme Court, over which tax it paid.
Medicines, in turn, lived under the single-phase PIS/Cofins regime of Law 10,147/2000, with product lists defining who collected and who took a presumed credit, plus ICMS by tax substitution. It was a tangle of per-product rules.
The reform reorganises this. ISS and PIS/Cofins on services and plans give way to IBS and CBS, with a 60% reduction and a specific regime for operators.
Legal basis
Healthcare’s treatment flows from the constitutional authorisation for differentiated regimes — the 60% reduction and the zero rate are in art. 9 of Constitutional Amendment 132/2023 — and, for plans, from the specific regime authorised by art. 156-A, § 6, II, of the Constitution. The detail is in LC 214/2025:
| Topic | Legal basis |
|---|---|
| 60% reduction (services, devices, medicines) | Art. 128 of LC 214/2025 |
| Health services (list and disallowances) | Art. 130 and Annex III |
| Medical devices | Art. 131 and Annex IV |
| Zero rate (devices, accessibility, menstrual health) | Art. 143 |
| Zero-rated medicines (therapeutic lines) | Art. 143, III, and art. 146 (wording of LC 227/2026); Annex VI |
| Specific regime for health plans | Arts. 234 to 238 |
Health services: the 60% reduction
Health services have the IBS and CBS rate cut by 60% (art. 128, II), over the list in Annex III, classified by the Brazilian Service Nomenclature (NBS), under art. 130. In practice, the hospital, clinic or professional pays 40% of the standard rate on those services.
An important safeguard for hospitals and clinics: amounts disallowed by the plans’ medical audit — what the operator refuses to pay and is not, in fact, paid — do not enter the IBS/CBS tax base of health services (art. 130, sole paragraph). Without it, the provider would risk paying tax on revenue that never reached the till.
Health plans: the specific regime
Here is the point that sets healthcare apart from almost everything else: health plans are not under the general rule — they have a specific IBS/CBS regime (arts. 234 to 238), grounded in art. 156-A, § 6, II, of the Constitution. The regime covers health insurers, benefit administrators, operating and health-insurance cooperatives and the other operators (art. 234) — and, being defined by the type of operator, it applies equally to individual and group plans. Funeral plans follow the same regime (art. 236).
| Element | Rule | Legal basis |
|---|---|---|
| Rate | The reference rate of each sphere, cut by 60% | Art. 237 |
| Tax base | Revenue (premiums and considerations received, on a cash basis, plus financial income from technical reserves), less claims paid, cancellations, intermediation and the administration fee | Art. 235 |
| Customer credit | Barred for those who buy the plan (exception for a taxpayer company, art. 57, § 3, IV, “f”) | Art. 238 |
The tax base is the heart of the regime. Instead of falling on the gross premium, the tax falls on the operator’s net revenue — premiums and considerations received, plus financial income from technical reserves, less claims actually paid and certain other deductions (art. 235). It is a design close to that of other financial sectors, taxing the margin, not the gross turnover.
Medicines and devices: zero or 60%
For medicines and equipment, the reform works in two bands, and each product’s classification decides:
| Band | What qualifies | Legal basis |
|---|---|---|
| Zero rate | Medicines for rare diseases, neglected diseases, oncology, diabetes, HIV and other STIs and cardiovascular diseases, plus the “Farmácia Popular” programme (art. 146, list updated every 120 days); enteral/parenteral nutrition (Annex VI); medical devices on specific lists; accessibility devices for PwD; menstrual-health products | Art. 143, I to IV, and art. 146 |
| 60% reduction (you pay 40%) | Other medicines and other medical devices on the Annex lists | Art. 128, III and V; art. 131 |
In other words: not every medicine is zero, nor every device 60%. The zero rate for medicines moved from a closed list to whole therapeutic lines (art. 146, as worded by LC 227/2026). Each item’s tax classification in the law’s annexes is what sets the burden.
Cases by sub-segment: the impact with numbers
To leave the abstract, four illustrative angles. Important: the reference rate used (~26.5%) is an estimate from the Ministry of Finance technical note (SERT/MF, 2024), not set in law; and the net effect depends on the use of credits as the regime shifts from cumulative to non-cumulative. The figures are scenarios, not promises.
Clinic and practice (Lucro Presumido)
Today, broadly, a clinic pays ISS of up to 5% plus cumulative PIS/Cofins of 3.65% — about 8.65% on revenue, with no credit. With the reform, the health service has an estimated effective rate of ~10.6% (40% of 26.5%), but now non-cumulative: the clinic starts crediting IBS/CBS on its purchases (rent, equipment, materials, energy, software). The net result depends on the cost structure — a lean clinic, almost only fees, gains less; one with many creditable inputs, more.
Hospital
The same effective service rate (~10.6%), but with far larger credits (medicines, implants/OPME, devices, linens, food, energy) and the advantage of disallowances staying out of the base (art. 130, sole paragraph). For an input-intensive hospital, the trend is favourable.
Health-plan operator
For an operator with BRL 100 million in considerations and BRL 80 million in claims paid, the base is not the gross premium: it is net revenue (~BRL 20 million, art. 235), on which the reference rate cut by 60% applies (~10.6% estimated) — about BRL 2.1 million, not the ~BRL 10.6 million a gross-turnover charge would yield.
Group (corporate) plan vs individual
The regime is the same, but the credit differs: a corporate group plan generates a credit for the taxpayer employer (art. 57, § 3, IV, “f”), while an individual plan generates no credit. For HR and benefits, that changes the real cost of the plan.
| Sub-segment | Today (approx.) | Reform (estimate) | Lever |
|---|---|---|---|
| Clinic (Lucro Presumido) | ~8.65% on revenue, no credit | ~10.6% effective, non-cumulative | credits on purchases |
| Hospital | ISS + PIS/Cofins + single-phase on inputs | ~10.6% + broad credits + disallowances out of base | credits + art. 130 sole para. |
| Operator (BRL 100m premium / BRL 80m claims) | ISS on revenue | ~10.6% on net base (~BRL 20m) ≈ BRL 2.1m | base = margin (art. 235) |
| Corporate group plan | no credit to the buyer | credit to the employer (art. 57, § 3, IV, “f”) | partial credit |
The honest read: for very labour-intensive services (which credit little), swapping the cumulative regime for the non-cumulative one may reduce the gain from the 60% reduction — which is why modelling by cost structure is what sets the result.
Points usually missed
Santas Casas and charity hospitals (immunity)
Non-profit charity hospitals may be immune to IBS and CBS on the services they provide, as social-assistance institutions (art. 9, III, of LC 214/2025 together with art. 14 of the National Tax Code; constitutional basis in art. 150, VI, “c”, and art. 195, § 7). Two caveats decide it: (1) the immunity does not reach the entity’s purchases (art. 9, § 4) — it pays IBS/CBS embedded in what it buys, which is exactly why the law grants a zero rate to medicines and devices acquired by these entities (arts. 144 to 146); (2) the benefit is conditional (no profit purpose, the requirements of art. 14 of the Tax Code and, for this treatment, CEBAS certification — LC 187/2021 — and service to the public health system, SUS). It is not automatic immunity.
Telemedicine
LC 214 does not name telemedicine. As a remote consultation has the same nature as an in-person consultation (Law 14,510/2022), there is solid ground for the 60% reduction, provided the service fits the corresponding NBS classification in Annex III. It is interpretation, not an express mention — worth following the IBS/CBS Steering Committee’s acts.
PIS/Cofins credit and the regime shift
The shift from cumulative to non-cumulative redesigns the use of credits on purchases. Clinics and hospitals currently on the Lucro Presumido regime (cumulative, no credit) should reassess whether the regime is still the most advantageous under IBS and CBS.
What changes in practice
Plan operators. The specific regime (arts. 234 to 238) changes the assessment engineering: the base becomes net revenue, with deductions for claims and fees, and credit is barred to the customer. Operators, insurers and benefit administrators must rebuild the assessment around art. 235 and review corporate contracts in light of art. 238 and its exception.
Hospitals and clinics. With the 60% reduction on services (art. 130), the critical point is managing credits on purchases and the correct treatment of disallowances, which stay out of the base.
Pharma industry and retail. The end of the single-phase PIS/Cofins and the split between zero rate and 60% reduction require reclassifying the whole portfolio by the law’s annexes and lists.
Common mistakes and risks
- Treating a health plan as a “60% health service”. A plan is a specific regime (arts. 234 to 238), with its own base and credit barred to the customer.
- Assuming every medicine is zero-rated. Only those on the therapeutic lines of art. 146; the rest get a 60% reduction (art. 128).
- Reading “60% reduction” as a 60% rate. It is a 60% cut on the standard rate — you pay 40% of it.
- Paying tax on disallowances. Amounts disallowed and not paid do not enter the base of health services (art. 130, sole paragraph).
- Thinking every charity is immune and “forgetting” the purchases. The immunity is conditional (CEBAS, art. 14 of the Tax Code) and does not cover acquisitions (art. 9, § 4).
Timeline
| Year | What happens |
|---|---|
| 2026 | Test year, with token CBS and IBS rates (0.9% + 0.1%) |
| 2027 | Full CBS (PIS and Cofins extinguished); healthcare’s mechanisms start applying to the CBS |
| 2029–2032 | Transition of the IBS, with ISS phasing down year by year |
| 2033 | Full regime: IBS and CBS in force in full |
Clinics, hospitals and operators feel the CBS first, in 2027. The ISS on services and plans only ends with the transition of the IBS, in 2033.
Model the reform’s impact on your healthcare operation
Services, plans, medicines and devices fall under different rules — and the net result depends on credits. The TaxUp team models the impact for clinics, hospitals, operators and industry (including charities) and structures the transition plan to 2033.
Frequently asked questions
How are health services taxed under the reform?
Health services have the IBS and CBS rate cut by 60% (art. 128, II, and art. 130) — you pay 40% of the standard rate. Amounts disallowed by the plans’ audit and not paid do not enter the base (art. 130, sole paragraph).
Will a clinic pay more or less under the reform?
It depends on the cost structure. The estimated effective service rate (~10.6%) is higher than today’s cumulative sum (~8.65% under Lucro Presumido), but it becomes non-cumulative — with credit on purchases. Clinics with many creditable inputs tend to gain; very labour-intensive ones, less. It is case by case, and the figures are estimates.
Will health plans pay IBS and CBS?
Yes, under a specific regime (arts. 234 to 238). The rate is the reference rate cut by 60% (art. 237), the base is the operator’s net revenue (art. 235) and credit is, as a rule, barred to those who buy the plan (art. 238). It applies equally to individual and group plans.
Does a corporate group plan generate a credit for the company?
Yes, partially. A corporate group plan contracted for employees and dependants allows a credit for the taxpayer employer (art. 57, § 3, IV, “f”), an exception to the general bar of art. 238. An individual plan generates no credit.
Are Santas Casas and charity hospitals immune?
They may be, as non-profit social-assistance institutions (art. 9, III, of LC 214/2025 together with art. 14 of the Tax Code). But the immunity does not reach the entity’s purchases (art. 9, § 4) and is conditional on requirements such as no profit purpose and CEBAS certification (LC 187/2021) with service to the SUS.
Does telemedicine qualify for the 60% reduction?
LC 214 does not name telemedicine. As a remote consultation has the same nature as an in-person consultation (Law 14,510/2022), there is solid ground for the 60% reduction, provided the service appears in the NBS classification of Annex III.
When do the rules start to apply?
Over the transition: full CBS in 2027 and IBS between 2029 and 2033. In 2026 the test period applies, with token rates.
Sources: Complementary Law 214/2025, arts. 9 (§ 4), 128, 130, 131, 143, 144–146 and 234–238, as amended by Complementary Law 227/2026 (art. 146, medicines; art. 57, § 3, IV, “f”); Constitutional Amendment 132/2023, art. 9 and art. 156-A, § 6, II; LC 187/2021 (CEBAS); Law 14,510/2022 (telehealth); LC 116/2003 (ISS — old system); STF — RE 651,703 / Theme 581 (ISS on health plans; rapporteur Justice Luiz Fux, 29/09/2016; thesis adjusted to exclude health insurance); reference rate ~26.5% per the Ministry of Finance technical note (SERT/MF, 2024), not set in law. Informational content; not a legal opinion.
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