Tax Cashback: Who Is Entitled to IBS and CBS Refunds?
Learn how the tax reform's cashback works, who is entitled to IBS and CBS refunds, how it works for individuals, and how to claim it.
Executive Summary
The Tax Reform introduced a mechanism little known outside Brazil: tax cashback, through which part of the IBS and CBS paid by the final consumer can be refunded. For micro and small business owners, this can represent a significant benefit — but the rules are complex and still depend on supplementary legislation. In this guide, understand who is entitled and how it works.
What Is Tax Cashback?
Tax cashback is the partial refund of CBS/IBS paid on the purchase of goods or services by the final consumer.
The logic behind the mechanism:
- CBS and IBS apply across the entire production and distribution cycle
- At the end of the chain (consumption), these taxes are “embedded” in the price
- For low-income consumers, this can represent a disproportionate tax burden relative to their spending
- Cashback seeks to refund part of that tax in order to correct this distributive inequality
Origin: The mechanism was inspired by international experiences, such as the VAT credit in some European Union countries.
Who Is Entitled to Cashback?
Low-Income Consumers
The main target audience is low-income consumers, defined by socioeconomic criteria established by the federal government. It is speculated that:
- Families enrolled in CadÚnico (the Single Registry for Social Programs)
- Monthly income of up to 2 minimum wages
- Consumers of essential products (food, hygiene, energy)
Companies: A Different Kind of Cashback
For companies, “cashback” does not apply in the same way — what exists is the crediting of CBS/IBS on inbound transactions. Companies record credits and use them to offset CBS/IBS liabilities on subsequent transactions.
It is not really a “cashback” — it is more similar to the old ICMS and PIS/COFINS credit system, but broader and more efficient.
How Does Cashback Work in Practice?
For the Final Consumer (Individual)
Theoretical model of operation:
Open Questions
- What will the exact percentage of the cashback be?
- Will the cashback be automatic or require a request?
- Will social program beneficiaries have priority?
- How will purchases be validated (e-invoice linked to the CPF)?
Cashback for Micro and Small Businesses
For companies under Simples Nacional (simplified tax regime) or of small size, there are specific considerations:
Expanded Crediting
Under the new system, the crediting of CBS/IBS will be broader than the current system:
- Companies will be able to credit CBS/IBS paid on ALL expenses (goods, services, costs)
- Under the current system (PIS/COFINS), many items were non-creditable
- This benefits SMEs that incur many service costs (accountant, lawyer, consultants)
Example:
Cashback via Simples Nacional
For companies under Simples Nacional, there are discussions about a specific cashback mechanism, given that these companies pay taxes in a simplified manner (simplified DAS).
Points under analysis:
- If the company is under Simples, will the cashback be deducted from the DAS?
- Or will it be a separate credit?
- How can double taxation be avoided if simplification is already in place?
How to Claim the Cashback
For Individuals
- Registration: Be enrolled in CadÚnico and have a valid CPF
- Linking the CPF to purchases: Request the CPF on the invoice (NFC-e) so the system can track purchases
- Annual return: it may be necessary to report the amounts in order to receive the cashback
- Automatic credit: potentially, the cashback will be deposited automatically into the family’s bank account
For Micro and Small Businesses
- Tax bookkeeping: keep e-invoices (NF-e) and service e-invoices (NFS-e) correctly issued
- Automatic credit: CBS/IBS crediting happens automatically via Split Payment — no request needed
- Offsetting: credits used to offset liabilities — no request required
- Refund: if there is excess credit after 12 months, it may be possible to request a refund
Impact for the Small Business Owner
Positive Scenario
- If the company has more CBS/IBS credits than liabilities, it has a “natural cashback”
- It may mean paying less net tax
- A fairer system because tax is paid on the value added (margin), not on the total cost
Point of Attention
- If the company has few expenses (much of its cost is untaxed labor), it may have fewer credits
- It may pay more net tax than under the current system
- It needs to assess the specific impact
Practical Example: A Small Restaurant
Scenario: A medium-sized restaurant, classified under Simples Nacional
Monthly expenses (companies that sell to it):
- Food supplier: R$ 15,000 (already including CBS+IBS)
- Gas/energy: R$ 3,000 (already including CBS+IBS)
- Rent: R$ 5,000 (already including CBS+IBS)
- Other services: R$ 2,000 (already including CBS+IBS)
- Total expenses: R$ 25,000 → CBS+IBS paid: ~R$ 6,625
Monthly revenue:
- Sales: R$ 40,000 (products for the final consumer — no credit to the restaurant)
- CBS+IBS on sales (Split Payment withheld by the bank): ~R$ 10,600
Result:
Does this represent a cost increase? It may, depending on the sector and the expense structure. That is why each company needs to perform its own analysis.
Checklist for the Micro/Small Business Owner
- Map all expenses and identify the CBS/IBS paid on each one
- Simulate the impact with the rates projected for 2027+
- Assess whether there are more credits or more liabilities under the new system
- Review the selling price to adapt to the new scenario
- Follow the supplementary legislation on cashback for legal entities
- Keep your tax records up to date to take advantage of credits
Want to understand how the Tax Reform affects your sector? On VMAHUB’s “Na Prática” section, we publish practical guides for companies. For a personalized analysis of your case, talk to our team: [email protected]
See also:
- Tax Credit Under the Reform
- Split Payment: What It Is and How It Works
- Simples Nacional Under the Tax Reform
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