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Lawyers can receive a 30% reduction in tax rates with tax reform. The discount is included in the reform regulation proposal that was delivered this week by the Minister of Finance, Fernando Haddad, to the president of the Chamber of Deputies, Arthur Lira.

 

The government's proposal provides for a 30% reduction in the rates of IBS - Tax on Goods and Services - new tax for States and municipalities - and CBS - Contribution on Goods and Services - new Federal contribution - on the provision of services from 18 regulated professions of a scientific, literary or artistic nature, including law.

 

See the full regulatory text .

The excerpt says the following:

 

CHAPTER II

 

THE 30% REDUCTION IN IBS AND CBS RATES

 

Art. 116. The IBS and CBS rates levied on the provision of services for the following  intellectual professions of a scientific, literary or artistic nature, subject to supervision  by a professional council, are reduced by 30% (thirty percent)  :

 

II - lawyers;

 

Lawyers may have reduced taxes with tax reform. 

Considering the average rate of 26.5% projected for the new taxes, the services of these professionals would be taxed at 18.6%. " The reduction in rates applies to individuals or legal entities that meet certain requirements, defined with the purpose of ensuring a direct link between the services provided and the professional qualifications of the providers of these services ", highlights the government in the justification of the project.

 

Other professionals are also included on this list for reduced tax rates, such as architects, biologists, accountants, economists, physical educators, engineers and others. 

 

After the regulation is approved, there must be a transition period for the end of old taxes. CBS Federal begins to be charged in 2026. The transition to IBS for states and municipalities runs from 2029 to 2032.

 

Processing : PLP 68/24

Victory for the legal profession

 

The national president of the OAB,  Simonetti, celebrated the proposal. Simonetti states that the forecast of a lower percentage for lawyers is a victory achieved by the Order, as it reflects the entity's proactive stance in seeking to defend the interests of Brazilian law before the Legislature.

 

The Order states that, during the processing of the tax reform PEC, it met with rapporteurs of the proposals in the Legislative Houses requesting that a differentiated taxation regime be created for business companies.

 

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Check out the full text of the tax reform

 

These companies provide services mainly to individuals, and the tax reform does not take into account the impossibility of their customers to deduct VAT credits - Value Added Tax. As a result, the proposal could increase tax collection to 28%, an increase of almost 600% in relation to current consumption taxation.

 

Tax reform

 

Last year, the Chamber approved , in two rounds, PEC 45/19, which promotes the updating of the Brazilian tax system. EC 132/23 was promulgated in December 2023.

 

With the intention of simplifying taxes, the EC replaced five taxes (ICMS, ISS, IPI, PIS ) with IBS - Tax on Goods and Services, in States and municipalities, and by CBS - Contribution on Goods and Services, at the Federal level . The new taxes are of the VAT (value added tax) type and seek to avoid cumulative taxation in production chains.

 

Another tax created is the IS - selective tax, to discourage the sale of products and services that are harmful to health and environmental sustainability. 

 

The proposal also changes rules for other taxes, such as state taxes, IPVA and ITCMD, and municipal taxes IPTU and Contribution on Public Lighting.