The transition from PIS and Cofins to CBS: what do you need to know?

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The transition from PIS and Cofins to CBS brings significant changes for Brazilian companies. With the extinction of PIS and Cofins in 2027 and the implementation of CBS (Contribution on Goods and Services), it is essential to understand what changes will occur in the tax regime and how existing credits will be treated.
In this article, you’ll find essential information about this transition, so your company knows where to start preparing for the changes ahead .
What are PIS and Cofins?
PIS (Social Integration Program) and Cofins (Contribution for the Financing of Social Security) are taxes levied on corporate revenue. As a general rule, these taxes are non-cumulative , as established by Law 10.637/02 and Law 10.833/03. This means that companies can india telegram data discount the PIS and Cofins credits paid on their input purchases. The PIS rate is 1.65%, while the Cofins rate is 7.6% for taxpayers who calculate under the non-cumulative regime.
On the other hand, there are sectors of the economy that are subject to the cumulative incidence of contributions, which generates a “cascade effect” . This phenomenon occurs because taxation is applied at each stage of the production chain, with no possibility of offsetting credits. In addition, the single-phase incidence, in which only one agent in the economic chain is responsible for the contribution, has also generated controversy and uncertainty for taxpayers.
The Need for Reform
The transition from PIS and Cofins to CBS is seen as a necessary solution to Brazil's complex tax scenario. Since their creation, these taxes have been the subject of several legal disputes and questions about their calculation basis. The expansion of the PIS and Cofins calculation basis, which now includes gross revenue instead of turnover, generated controversies that culminated in decisions by the Federal Supreme Court (STF) recognizing the unconstitutionality of certain rules.
The creation of the CBS, the Contribution on Goods and Services, aims to simplify this tax structure. With a single tax rate and the possibility of offsetting credits, it is expected that there will be a decrease in legal disputes and an environment of greater legal security for companies .