Chamber of Deputies Approves Complementary Bill No. 68/2024 (Tax Reform)

Originally published in January, 2025

Following the amendments proposed by the Federal Senate, on 12/17/2024 the Chamber of Deputies approved the text of Complementary Bill No. 68/2024, the Tax Reform. The main objective of the bill is to establish the foundations of the new tax system which, seeking to simplify Brazilian tax rules, will replace five taxes (ICMS, ISS, IPI, PIS and Cofins) with two main taxes: the IBS (Tax on Goods and Services) and the CBS (Contribution on Goods and Services). In addition, the Reform will also introduce the IS (Selective Tax), whose purpose is to discourage the consumption of certain products considered harmful to health and the environment.

Among the provisions rejected by the deputies, we highlight: (i) reduced rates for certain sectors, products and services, such as sanitation, mineral water, sales representatives, cookies and crackers; (ii) the application of a 5% rate to Football Corporations (Sociedades Anônimas do Futebol – SAF), which had been proposed by the senators (a final rate of 8.5% will be maintained for SAFs, as provided in the original text); and (iii) the possibility of claiming presumed IBS and CBS credits related to purchases of goods and services from rural producers or integrated rural producers.

Regarding the main provisions that were maintained, many of which aim to reduce the tax burden on the poorest segments of the population, the approved text provides for: (i) the adoption of a cashback system refunding 100% of the CBS and 20% of the IBS levied on electricity, water, gas and telecommunications bills for low-income families registered in the Unified Registry (Cadastro Único – CadÚnico); (ii) a 0% IBS and CBS rate applicable to medicines specified in an exhaustive list attached to the complementary law; (iii) the imposition of the IS on sugary drinks and other products harmful to health (however, weapons and ammunition were excluded from the scope of this tax); and (iv) an IBS and CBS exemption on products that make up the basic food basket (rice, beans, milk, meat, fish and fruit).

The text now proceeds to presidential sanction.

Lorusso & Partners continues to monitor all updates on this matter and remains at your disposal to clarify any relevant questions.