Brazil tax reform: 8 key update — 8 mins
Hey, I’m Douglas, Editor-in-Chief of the Brazilian Tax Reform Portal 🇧🇷.
1) Importation
The government of Luiz Inácio Lula da Silva (PT) increased the import tax rate on several products on February 4, 2026 — including smartphones, industrial machinery, and means of transportation (read more)
The increase is expected to generate US$ 2,73 billion (R$ 14 billion) in federal revenue in 2026, according to projections in the Annual Budget Law.
A technical note from the Secretariat for Economic Policy of the Ministry of Finance defended the measure, arguing that foreign exporters could impact the Brazilian market — signaling a more protectionist stance by the country.
2) Trump
The President of the United States, Donald Trump, said he will issue a new executive order imposing 10% tariffs on countries that sell to the United States. The announcement came after the country’s Supreme Court blocked the tariffs introduced by the Republican in 2025 (read more)
3) Steering Committee
The Steering Committee of the IBS (Tax on Goods and Services) reappointed Flávio César de Oliveira as the agency’s interim president (read more)
The election for the permanent president will be held on March 3, 2026, during an in-person meeting of the members in Brasília
4) Federal revenue collection
Federal government revenue reached US$ 61,9 billion (R$ 325.8 billion) in January 2026, according to Receita Federal (read more)
The increase was 3.56% compared to the same period last year, in inflation-adjusted terms. It represents a new record for the month in the historical series.
5) Split payment
Split payment is the “heart” of the consumption tax reform, said Cristiane Coelho, president of the National Confederation of Financial Institutions (Fin) (read more)
The split is a mechanism that allows for the automatic separation and collection of consumption taxes (CBS and IBS) at the time financial transactions are settled.
6) Datacenters
The Chamber of Deputies approved the bill (PL 278 of 2026) that creates Redata (Special Tax Regime for Datacenter Services) (read more)
The program grants tax incentives for five years to encourage the installation of datacenters in Brazil focused on cloud computing and artificial intelligence. It applies to the following taxes:
PIS (Social Integration Program) / Cofins (Contribution for the Financing of Social Security) – Suspension on the acquisition of machinery and equipment.
PIS/Cofins-Import – Suspension on the entry of goods from abroad.
IPI (Tax on Industrialized Products) – Applicable to industrial technology components manufactured in the Manaus Free Trade Zone and listed by the Executive Branch.
II (Import Tax) – Applied only to products with no domestic equivalent.
7) VAT in Austria
Since January 1, 2026, feminine hygiene products and certain contraceptives in Austria have been exempt from VAT, with the explicit political objective of reducing the financial burden associated with menstruation and contraception (read more)
8) Tax expenditures
The Addis Tax Initiative (ATI), in partnership with the Council on Economic Policies (CEP) and the German Institute of Development and Sustainability (IDOS), held the 7th virtual meeting of the Community of Practice on Tax Expenditures (read more)
🇧🇷🔍 Brazil is changing. Are you watching closely?
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