Complementary Law 214/2025: initial parameters for the transition to IBS and CBS

The enactment of Complementary Law 214/2025 sets out the operational contours of the new consumption tax framework established by Constitutional Amendment 132/2023. The text consolidates three taxes — the Tax on Goods and Services (IBS), the Contribution on Goods and Services (CBS) and the Selective Tax (IS) — and organizes the transition from the existing system to the new model over a multi-year schedule.

Transition schedule

The existing and new regimes will coexist during the transition, with progressive reductions in the rates of the replaced taxes and corresponding increases in IBS and CBS. The coexistence requires dual adaptation of ancillary obligations, with simultaneous calculation under both systems.

Special regimes

The Complementary Law preserves special regimes for sectors such as healthcare, education, public transportation, agribusiness and small companies under the Simples Nacional regime. The design of these regimes — reduced rate, exemption or single-phase taxation — depends on secondary regulation still under development.

Open points

Several material issues remain open: the calibration of the reference rate, the operation of split payment, the cross-crediting mechanism between IBS and CBS and the criteria for revenue allocation between the Federal Union, States and Municipalities.

Practical recommendations

The transition requires, from this point on, detailed mapping of operations subject to each tax, review of contractual clauses addressing tax burden and assessment of applicable special regimes. FMP Advogados monitors secondary regulation and keeps its clients informed of definitions with operational impact.