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As it is widely known, the purpose of the tax reform is to reorganize the taxation on consumption through a dual VAT (Value Added Tax) model. This system aims to unify and replace existing taxes, as well as simplify the tax structure and make it more equitable.

To that end, new taxes and contributions have been introduced, such as the Goods and Services Tax (IBS), the Social Contribution on Goods and Services (CBS), and the Selective Tax (IS), which will replace the existing taxes (ICMS, ISS, PIS, Cofins, and IPI).

How beautiful… on paper!

In practice, we will need to understand how all this will work, as it seems that each taxable event could result in the incidence of more than one tax, benefiting the Federal Government, States, and Municipalities.

Although the testing phase for the collection of IBS and CBS is scheduled to begin in January 2026, with an initial tax rate of 0.1% for IBS and 0.9% for CBS; the final farewell to PIS and Cofins is set for December 31, 2026, with the effective collection of CBS starting on January 1, 2027, at a rate reduced by 0.1 percentage points.

It is a fact that, along with the changes, taxpayers’ doubts and concerns arise, especially regarding the credits and credit balances of these contributions post-January 1, 2027, arising from various situations (exports, deferrals, exemptions, rate reductions, interstate transactions, among others). In this regard, Complementary Law No. 214/2025 ensures that taxpayers will not be harmed.

Complementary Law No. 214/2025 guarantees that all PIS/Cofins credits, including presumed, unappropriated, or unused credits until the extinction date, will remain valid and usable within the legal time frame for their use, provided they are registered in the PIS and Cofins bookkeeping environment.

Thus, they may be used for offsetting amounts due under CBS, or even refunded in cash or offset against other federal taxes, adhering to the existing conditions and limits for refund and/or offset of tax credits. However, such credits will not be monetarily adjusted, unless their use (timely) was illegally prevented by the government.

The legislation also ensures the continuation of credit appropriation for credits that, on the date of the extinction of PIS/Cofins, are being appropriated on an installment basis – such as in cases of depreciation, amortization, or monthly quotas, preserving the originally applicable conditions.

This rule covers credits linked to assets in fixed and intangible assets, buildings incorporated into the company’s assets, and imported goods whose appropriation occurs on an installment basis. However, if the asset is sold before full appropriation, the remaining credit portions will be lost.

The transition period may also cover returns or cancellations of sales made under the previous regime. In these cases, the law ensures the right to credit for goods sold before January 1, 2027, to offset against the CBS itself, but refunds in cash or use for settling other federal taxes are prohibited.

Additionally, if the taxpayer is subject, on December 31, 2026, to the cumulative or tax substitution regimes, it will also be possible to recognize presumed CBS credit on stock of goods existing on January 1, 2027, provided the following requirements are met:

The goods must be new and acquired from a Brazilian company or imported for resale or use in the production of goods and provision of services;

They must not have been purchased with a zero rate, exemption, suspension, or non-incidence of PIS and Cofins;

They cannot be for personal use and consumption, real estate, or incorporated into fixed assets;

The presumed credit must be determined and appropriated by June 30, 2027;

The credit must be used in 12 equal and successive monthly installments, starting from the period following the appropriation;

The credit can only be used to offset CBS, and it is prohibited to offset it against other taxes or receive a refund.

It is noted that PIS/Cofins credits originating from the transition system will have priority in compensation over other CBS credits, which ensures liquidity for older balances. However, the five-year period remains valid, starting from the last day of the period of appropriation, for the use of the credit.

Remember, the Federal Revenue Service will still issue additional guidelines and regulations, based on which a viable, safe, and balanced transition between the regimes is expected!

As the end of PIS/Cofins and the beginning of CBS approach, uncertainties are taking hold of accounting and tax law professionals in general.

Even after the regulation of Complementary Law No. 24/2025 – eagerly awaited – the effectiveness of the rules will depend on diligent management by taxpayers, an essential condition for an efficient transition, in order to avoid financial losses.