Brazil's VAT Reform Progress: April 2024

Brazil's Value Added Tax (VAT) regulation debates are planned for April, with key discussions and regulatory steps taking place. Here are the highlights from the latest developments as of April 9, 2024:

Introduction of Complementary Bills 

On April 8, Minister of Economics Haddad announced that the administration would introduce complementary bills regulating the new VAT system in the following week.

• These bills are currently undergoing political and legal review at the Office of the Chief of Staff before being presented to congress.

Two Separate Proposals 

Two distinct proposals are being worked on:

• The first proposal covers the Tax on Goods and Services (IBS), the Contribution on Goods and Services (CBS), and the Excise Tax (IS).
• The second proposal addresses the Steering committee and the Tax Litigation process.

Key Legislative Theme in 2024 

VAT reform regulation will be a pivotal legislative theme this year. The administration's focus is on aligning with subnational entities before presenting the proposals to Congress, anticipating demands from the private sector during the legislative process.

Priorities 

CBS and IBS taxes are set as priorities, with the supplementary bill likely gaining approval after negotiations with organized economic groups seeking more favorable taxation rules.

Importance of 2024 Approval 

Approving these provisions in 2024 is crucial for the smooth transition of the VAT system, which is scheduled to commence in 2026. Certain complex issues may be postponed until 2025, particularly those related to the steering committee and tax litigation rules.

SOURCE:

• More information available with Euroasia group