Tax Credit Under the Reform: How It Works and Its Impact on Product Prices
Understand how tax credits work under CBS and IBS, the 'credit scooter' problem, accounting treatment, and the impact on final product prices.
Executive Summary
The tax credit is the heart of the non-cumulative CBS and IBS system. Unlike the current PIS/COFINS regime, where credits are fragmented and subject to countless limitations, the new system promises to be broader and more uniform — but that does not mean simple. In this guide, Vivian Sampaio explains how credits work, the controversial “credit scooter problem,” and how to account for them properly.
The Principle of Non-Cumulativity
CBS and IBS are non-cumulative taxes — this means that at each stage of the chain, the taxpayer can “offset” the tax already paid at previous stages.
A practical analogy:
Picture a production line:
- Steel mill sells steel sheets for R$ 100 (with R$ 10 of CBS+IBS included)
- Furniture manufacturer buys the sheets for R$ 100 and pays R$ 10 of CBS+IBS, but can CREDIT those R$ 10
- Wholesaler buys furniture for R$ 150 and can credit the CBS+IBS already paid
- Retailer buys for R$ 180 and can credit everything paid before
- Final consumer pays the full price, with no credit (the end of the chain)
Result: The tax falls only on the “value added” at each stage, not on the total accumulated value.
How Credits Work in Practice
General Rules for CBS/IBS Crediting
- CBS and IBS credits are independent — each is managed on its own
- Credits can be offset against debits of the same tax
- Credits expire after 5 years (confirmed — Article 173 of the National Tax Code: a 5-year statute of limitations for recovering tax credits)
- Credits may be transferred in specific situations, such as mergers, spin-offs, or corporate acquisitions, as provided for in complementary legislation
- There is no “negative credit” — if credits exceed debits, the balance remains as a credit to be used in subsequent periods; there is no negative payment
Types of Permitted Credits
Important note: Unlike PIS/COFINS, the new system provides a clearer list of what is and is not creditable.
The “Credit Scooter” Problem (Kamikaze Credit)
One of the biggest risks identified by specialists — nicknamed the “scooter problem” or “kamikaze credit” — arises when companies obtain credits larger than the corresponding debits, creating a perpetual credit cycle.
How it works:
Proposed solutions:
- Minimum value added — capping credits at a percentage of the value added
- Consumer-facing test — if a company operates only B2B, there are crediting limits (under the anti-abuse mechanisms set out in Bill 1087/25)
- Differentiated cashback — when credits exceed debits for X periods, a mandatory refund applies
Caution: The complementary legislation (Bill 1087/25) is still under deliberation and is expected to bring definitive rules on these anti-abuse mechanisms.
Numerical Example: Tax Credit in Practice
Company: Indústrias Metálicas Brasileiras Ltda Activity: Manufacture and sale of metal parts
January 2027 Operations:
Inputs (purchases):
- Raw materials (iron, steel): R$ 200,000 + CBS+IBS (R$ 53,000) = R$ 253,000
- Machining services (third party): R$ 50,000 + CBS+IBS (R$ 13,250) = R$ 63,250
- Electricity: R$ 20,000 + CBS+IBS (R$ 5,300) = R$ 25,300
- Warehouse rent: R$ 15,000 + CBS+IBS (R$ 3,975) = R$ 18,975
Total CBS+IBS credits: R$ 75,525
Outputs (sales):
- Parts sold to the automotive industry: R$ 400,000 + CBS+IBS (R$ 106,000) = R$ 506,000
- Parts sold to a wholesaler: R$ 100,000 + CBS+IBS (R$ 26,500) = R$ 126,500
Total CBS+IBS debits: R$ 132,500
Calculation:
Result: The company pays R$ 56,975 in CBS+IBS for the month, not R$ 132,500 (the full amount).
Value of the credit to the business: Saving R$ 75,525 per month represents an effective 57% reduction in the tax payable.
Impact on Product Prices
Credits directly affect the final price of products:
Without Credit (Old System — cumulative PIS/COFINS)
With Credit (CBS+IBS System — non-cumulative)
Result: The final price drops from R$ 327,750 to R$ 264,853 — a reduction of 19.2% — because the tax falls only on the value added, not on all the costs.
This benefits:
- Final consumers (lower prices)
- Exporting companies (credits realized earlier)
- Companies with a high cost-to-product ratio (processing sectors)
How the Accountant Should Record Credits
Accounting Treatment (simplified example)
Required Documentation
- Inbound electronic invoice (NF-e) itemizing CBS and IBS
- Outbound electronic invoice (NF-e) itemizing CBS and IBS
- SPED Fiscal with credit records
- Accounting ledgers for the amortization of credits
Recognition Deadlines
- CBS/IBS credits on fixed assets: recognize upon depreciation/write-off of the asset
- CBS/IBS credits on expenses: recognize in the month of the expense
- Credits on fixed assets: recognized according to the depreciation or write-off of the asset; credits on operating expenses: recognized in the month the expense occurs
Checklist for the Accountant
- Map all credits available in the operation
- Classify credits by type (assets, services, costs)
- Define a time-based recognition method
- Configure the ERP to record CBS and IBS credits separately
- Train the team to identify creditable operations
- Monitor regulations on the credit scooter ✅ (Bill 1087/25 under deliberation — anti-abuse mechanisms being defined)
Want to understand how the tax reform affects your sector? In the /en/napratica section, VMAHUB publishes practical guides for companies. For a tailored analysis of your case, talk to our team: [email protected]
Read also:
- Split Payment: What It Is and How It Works
- Tax Cashback: Who Is Entitled
- CBS: What It Is and How It Replaces PIS/Cofins
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