Tax Reform on Consumption
Constitutional Amendment No. 132/2023 + Ancillary Law No. 214/2025
Rural Producer – Individual or Legal Entity – and Integrated Rural Producer
What does Integrated Rural Producer mean?
Paragraph 1 of Article 164 of Ancillary Law 214/2025 defines an integrated rural producer as:
[…] the agroforestry producer, whether an individual or legal entity, which, individually or associatively, with or without the labor cooperation of employees, is bound to an integrator through a vertical integration agreement, receiving goods or services for production and for the supply of raw material, intermediate goods or final consumer goods.
Will a rural producer be a taxpayer of IBS and CBS, the new taxes on consumption?
- Non-Taxpayers:
Individual or Legal Entity: Revenue less than BRL 3,600,000.00 in the calendar year;
Integrated Rural Producer: Not subject to gross revenue cap.
Legal Entity (including Association and Cooperative): Revenue less than BRL 3,600,000.00 in the calendar year + Exclusively comprising individual rural producers with revenues of less than BRL 3,600,000.00 in the calendar year.
- Taxpayers:
– Revenue equal to or greater than BRL 3,600,000.00 in the calendar year prior to Ancillary Law 214/2025;
– Revenue equal to or greater than BRL 3,600,000.00 in the calendar year:
- If during the calendar year a rural producer surpasses the annual revenue cap, they become a taxpayer from the 2nd month following the excess;
- If the excess does not surpass 20% of the cap, the rural producer becomes a taxpayer in the subsequent calendar year.
- Equity Interest:
– The cap of BRL 3,600,000.00 is ascertained by adding the revenues of all legal entities involved.
- Cap Update:
– Annual, based on the variation of Broad Consumer Price Index (IPCA).
Can a Rural Producer and Integrated Rural Producer, with revenue less than BRL 3,600,000.00, choose to become IBS and CBS taxpayers?
Yes, at any time, they can register as IBS and CBS taxpayers on a regular basis.
Effects of Registration: From the 1st day of the month following the month in which the request was made.
The option for such registration will be irreversible for the entire calendar year and will apply to subsequent calendar years.
However, the rural producer and the integrated rural producer may waive this option, under the terms of the regulation to be issued, at which time they will no longer be taxpayers of IBS and CBS from the first day of the calendar year following the waiver of the option, subject to the revenue cap of BRL 3,600,000.00 for the rural producer.
Presumptive Credits in Acquisitions of Non-Taxpayer Rural Producer
Who Can Appropriate Presumptive Credits?
- IBS and CBS taxpayers on a regular basis;
- Cooperative corporations in relation to the goods and services of their non-taxpayer members.
Definition of Percentages
- Percentages defined and disclosed annually until September;
- Joint act of the Minister of Finance and the IBS Steering Committee;
- Effective as of January of the following year.
Differentiation of Percentages
- Percentages may range according to the product or service provided;
- Classes are established in the relevant regulation.
Exclusions
- In defining the percentages of presumptive credits, the acquisitions of goods and services for personal use and consumption will not be considered.
Use of Presumptive Credits
- Deduction of the amount of IBS and CBS owed by the taxpayer;
- Compensation allowed according to Ancillary Law 214/2025.
Application to Cooperative Corporations
- Also applicable to cooperative corporations;
- Except when the product is sent for processing in the cooperative and returns to the member.
Point of attention for the rural producer in the tax reform with the creation of IBS and CBS
It should be noted that the tax reform, upon the institution of IBS and CBS, imposes substantial changes to the rural producer’s taxation regime, which will require greater attention in terms of legal and operational compliance, regardless of whether or not it is a taxpayer of the new consumption taxes.
Autor: Sandro Miguel Siqueira da Silva Junior • email: sandro.junior@ernestoborges.com.br
