By Raphael Scheffer Lima and Jéssica Heinzen
The Tax Reform introduced by Constitutional Amendment No. 132/2023 and regulated by Complementary Law No. 214/2025 established neutrality and non-cumulativity as the pillars of the new system.
To that end, both the Constitution and the Complementary Law expressly provide that the new taxes — IBS and CBS — must not compose the tax base of other taxes, preventing cascading taxation. Thus, under the concept of “transaction value” for IBS and CBS, these taxes themselves are excluded, along with ICMS, ISS, PIS/COFINS, and IPI.
On the other hand, the provision that prohibited the inclusion of IBS and CBS in the ICMS, ISS, and IPI tax bases during the reform’s transition period — that is, until these taxes are phased out — was removed from the legislation.
This regulatory gap has generated intense debate. States and municipalities argue that including IBS and CBS in the ICMS and ISS tax bases is necessary to prevent revenue losses through 2033. Conversely, lawyers and experts warn that such inclusion violates the principles of neutrality and non-cumulativity.
Last week, the Treasury Department of the State of Pernambuco published Tax Consultation Resolution No. 39/2025, concluding that the amounts corresponding to IBS and CBS must be included in the ICMS tax base. The decision is grounded in Article 13 of Complementary Law No. 87/1996 (the Kandir Law), which defines the ICMS tax base as the transaction value, including taxes “highlighted and passed on in the price” to the consumer.
The Resolution states that “because IBS and CBS are indirect taxes and, by their nature, are passed on in the price to the consumer, it is evident that, under the aforementioned rule, they will compose the ICMS tax base.” This interpretation binds the actions of the Pernambuco tax administration and opens the door for other states and municipalities to adopt similar positions.
To address this uncertainty, PLP No. 16/2025 is currently under consideration in Congress. The bill expressly seeks to prohibit the inclusion of IBS and CBS in the ICMS, ISS, and IPI tax bases. However, until clearer legislation is enacted, what this scenario reveals is that although the Tax Reform aims for transparency and simplicity, legal uncertainty will permeate the entire transition period, subjecting taxpayers to new assessments and administrative and judicial disputes.
Therefore, relying on specialized advice is essential for companies to adapt to the new tax system and mitigate the risks that will inevitably arise.
Marins Bertoldi Advogados remains attentive to developments related to the Tax Reform and is available to support companies throughout this transition.
