Complementary Law (“CL”) No. 214/2025 establishes the Social Contribution on Goods and Services (“CBS”), as well as the fundamental aspects of the transition between the current tax regime and the new consumption-based taxation model introduced by Constitutional Amendment No. 132/2023, known as the Tax Reform.
One of the issues that has sparked debate concerns the PIS and COFINS contributions under the new system, as they will be replaced by the CBS in 2027.
In this regard, one of the most relevant topics for taxpayers is the treatment of PIS and COFINS credit balances, especially with respect to how they may be used under the new tax regime.
In fact, given the temporal and legal limitations, as well as the changes in credit entitlement compared to the current system, taxpayers who usually have significant credit balances will need to carefully plan the monetization of any remaining PIS and COFINS credits as of 2027. It is important to mention that the analysis must also include the initial credit rules of the CBS applicable to the system change.
In general, CL No. 214/2025 established that PIS and COFINS credits, including presumed credits, that have not been appropriated or used by the date of the extinction of the contributions will remain valid and may be offset against the CBS due. For this purpose, such credits must be duly recorded in accordance with the applicable rules until their extinction and comply with the applicable statute of limitations.
Additionally, the regulation provides that the credits may be refunded in cash or offset against other federal taxes, provided that, on the date of the request or the declaration, the conditions and limits applicable to taxes administered by the Brazilian Federal Revenue Service (“RFB”) are observed. Thus, the RFB regulations may also establish additional obligations.
CL No. 214/2025 also addresses more specific crediting situations. Thus, it ensures the continued appropriation of PIS and COFINS credits which, at the date of the extinction of such contributions, are still being appropriated in installments, as in cases of depreciation, amortization, or monthly quotas. In fact, CL No. 214/2025 authorizes the continuation of the appropriation of these credits under the CBS regime, in the form of presumed credits. This transition preserves the originally applicable conditions, such as the timing criterion for appropriation and the rate in effect at the time the credit was created.
This rule covers credits related to fixed tangible and intangible assets, buildings incorporated into the company’s assets, and imported goods whose appropriation occurs on a fractional basis.
Also eligible for use are credits that have not yet been appropriated and that, at the time of the extinction of the contributions, were merely awaiting the fulfillment of legal requirements for the start of their use, such as the asset entering into operation or the start of amortization.
It is important, however, that the taxpayer is attentive to the early disposal of these assets, as a sale before full appropriation may result in the loss of the remaining credit installments.
Knowing that the transition may also involve returns or cancellations of sales made under the previous regime, the legislation seeks to ensure the right to credit in such cases, in order to avoid losses arising from the change in the model.
Thus, as of January 1, 2027, it will be permitted to credit the CBS based on the PIS and COFINS amounts levied on goods sold before that date and which have subsequently been returned or canceled. However, the credit may be used exclusively to offset the CBS itself, with reimbursement in cash or use for payment of other federal taxes being prohibited.
Additionally, if the taxpayer, on December 31, 2026, was subject to the cumulative regime or the tax substitution regime, it will also be possible to recognize presumed CBS credit on inventories of tangible goods existing as of January 1, 2027. The credits will be allowed in relation to inventory goods for which no credits were calculated due to being subject to the referred calculation regimes, and provided that the taxpayer is under the regular CBS regime in 2027.
Included in this provision are, among others, cases of pharmaceutical, perfumery, cosmetic, and personal hygiene products subject to concentrated taxation at the manufacturer or importer level; automotive goods subject to special regimes combining monophase taxation and tax substitution; machinery, equipment, and vehicles whose manufacturers or importers acted as tax substitutes, collecting contributions due from wholesalers and retailers; as well as cigarettes and cigarillos, traditionally covered by specific regimes that require advance collection of contributions at the import stage.
In addition to the aforementioned cases, the presumed CBS credit may be appropriated in relation to the portion of the inventory value which, at the time of acquisition, was subject to partial credit denial under the former regime.
This specifically refers to situations in which the taxpayer was subject to the non-cumulative PIS and COFINS regime, but with mixed revenues — that is, part subject to taxation and part under the cumulative regime — which required the application of allocation criteria for the purpose of proportional crediting.
However, the appropriation of credit on inventory is subject to compliance with certain requirements. Only new tangible goods, acquired from a legal entity domiciled in the country or imported, and intended for resale or for use in the production of goods for sale or in the provision of services to third parties, will be eligible. There is no provision for inventory of intangible goods or services to be resold by the taxpayer.
Explicitly excluded are goods acquired with a zero rate, exempt, suspended or not taxed, as well as those classified as for personal use and consumption, real estate, and fixed assets.
In the specific case of contracts with public service concessionaires, the regulation extends this exclusion to goods that are not classified as fixed assets, due to the accounting standards applicable to such operations.
Still regarding credits on previous inventories, the method for verifying and valuing these inventories will be regulated later by an act of the Federal Executive Branch, which may involve assessing the inventory and its value or applying another method.
For goods acquired in the domestic market, the credit will be calculated by applying a rate of 9.25% over the inventory value. In the case of imported goods, the credit amount will correspond to the amount effectively collected as PIS/COFINS-Importation, excluding the additional rate provided for in specific legislation.
This credit must be calculated and appropriated by the last day of June 2027 and may be used in 12 equal and successive monthly installments, starting the month following its appropriation. Its use will be restricted to offsetting the CBS itself, with both reimbursement in cash and offsetting against other federal taxes being prohibited. The 12-month period requires planning in order to achieve the greatest possible efficiency.
It is worth mentioning that PIS and COFINS credits arising from the transitional system will have priority in offsetting over other CBS credits, ensuring priority liquidity for older balances. Finally, as a general rule, the right to use the credits will expire within five years from the last day of the assessment period in which the credit was appropriated.
We emphasize that the Executive Branch must still issue further guidelines and regulations. Undoubtedly, as the extinction of PIS and COFINS contributions and the start of CBS collection approaches, the lack of regulation generates legitimate concern among taxpayers regarding the feasibility of a safe and balanced transition between regimes.
Moreover, it should be noted that even after the necessary regulation is approved, the effectiveness of these rules will depend on careful management by taxpayers, especially regarding bookkeeping, documentation, and compliance with legal deadlines.
Proper preparation is therefore an essential condition for a less burdensome and more efficient transition for taxpayers.
