Tax Reform in the Services Sector: understand the approval of the base text
Approved in July of this year in the Chamber of Deputies, the tax reform will have significant consequences for the services sector, which represents a considerable part of Brazil's Gross Domestic Product (GDP), in addition to being the sector that employs the most people in the country.
The model adopted is called Dual VAT, represented by CBS (Federal) and IBS (State and Municipal), both taxes will have a series of characteristics in common, including identity of generating facts, calculation bases, hypotheses of non-incidence, passive subjects, immunities, specific, differentiated or favored taxation regimes, in addition to non-cumulative and crediting rules.
Broad base and calculation on the outside
The broad base of CBS and IBS taxes means that they gambling data saudi arabia will be levied on a variety of transactions involving services. In addition, taxes will be calculated “extra”, i.e. they will not be included in the price of the service, but will be calculated separately.
The basic text of the Tax Reform in the Services Sector
Currently, in general and for all sectors, the collection of PIS and Cofins can be carried out cumulatively, with a rate of 3.65% and without the right to take credit, or non-cumulatively, with a rate of 9.25% and the right to credit on certain acquisitions.
On the other hand, the ISS (Service Tax) is determined individually by each municipality, with rates ranging from 2% to 5%. This tax is levied on specific services listed in a supplementary law.
As for CBS and IBS, which will replace PIS, COFINS, IPI, ICMS and ISS, the text of the tax reform did not define specific rates, leaving this criterion to the Federal Senate and subsequently to the federated entities themselves. However, there is an expectation that a rate of 25% may be established for the two new taxes, together.
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