PIS and COFINS in Brazil: The Federal Turnover Taxes (and How CBS Replaces Them)
Short answer. PIS and COFINS are two federal contributions levied on a company’s gross revenue. Together they run at one of two rates depending on your regime: 3.65% under the cumulative regime (no credits) or 9.25% under the non-cumulative regime (with input credits). Which one applies is tied to your corporate income-tax election — lucro presumido companies are usually cumulative, lucro real companies non-cumulative. From 2027, PIS and COFINS are replaced by CBS under the tax reform. This brief explains how they work today and what the transition means.
What PIS and COFINS are
Despite the acronyms, PIS (Programa de Integração Social) and COFINS (Contribuição para o Financiamento da Seguridade Social) function together as Brazil’s main federal tax on revenue. Almost every sale of goods or services by a Brazilian company carries them. They are separate from — and stack on top of — corporate income tax (IRPJ/CSLL) and the state/municipal indirect taxes (ICMS, ISS).
They come in two regimes, and the difference is large.
The two regimes
Cumulative regime — 3.65%, no credits
- PIS 0.65% + COFINS 3.0% = 3.65% on gross revenue.
- No input credits — the tax cascades at each stage of the chain.
- Generally applies to companies taxed under lucro presumido (and to certain revenues regardless of regime).
[Source: Lei 9.718/1998 — Planalto]
Non-cumulative regime — 9.25%, with credits
- PIS 1.65% + COFINS 7.6% = 9.25% on gross revenue.
- Input credits are allowed on many purchases (inputs, certain costs and expenses), so the effective burden is on added value, not gross turnover.
- Generally applies to companies taxed under lucro real.
[Source: Lei 10.637/2002; Lei 10.833/2003 — Planalto]
Because the regime is tied to your income-tax method, the lucro real vs. lucro presumido decision is also a PIS/COFINS decision — see Lucro Real vs. Lucro Presumido. A business with heavy creditable inputs may pay less under 9.25%-with-credits than under 3.65%-no-credits; a lean services business may pay more.
PIS/COFINS on imports
Imports carry their own layer, PIS/COFINS-Importação, charged on the customs value of goods and on payments for imported services. Combined, it is roughly 11.75% on goods and 9.25% on services, with product-specific adjustments. It is part of the broader import-tax stack and, for lucro real importers, can generate credits. [Source: Lei 10.865/2004 — Planalto]
Why foreign companies get this wrong
Three recurring traps:
- Assuming one rate. The same sale can bear 3.65% or 9.25% depending on your regime — model both before choosing lucro real or presumido.
- Ignoring the credit system. Under the non-cumulative regime, input credits are cash. Companies that fail to track and claim them overpay.
- Forgetting the import layer. PIS/COFINS-Importação applies on top of II, IPI and (during the transition) IBS/CBS — it is a real component of landed cost.
How CBS replaces PIS and COFINS
Under the consumption-tax reform, PIS and COFINS are absorbed into CBS (Contribuição sobre Bens e Serviços), the new federal VAT-style tax:
- 2026 — a pilot year. CBS is charged at a token 0.9%, offset against PIS/COFINS, so there is no net additional burden — the year is about systems and invoicing.
- 2027 — CBS takes full effect and PIS and COFINS are extinguished. CBS is broadly non-cumulative with generous crediting — essentially the non-cumulative logic, generalized across the whole chain.
So the non-cumulative regime you may operate today is the closest preview of how CBS will feel. See Is There VAT in Brazil? IBS and CBS Explained and IBS and CBS in 2026, and, for the credit mechanics that carry over, IBS/CBS Credits, Refunds and Cash Flow.
Practical takeaway
- Know your regime. Cumulative (3.65%, no credits) or non-cumulative (9.25%, with credits) follows your income-tax election.
- Run the credit math. If you have significant creditable inputs, 9.25%-with-credits can beat 3.65%-flat.
- Budget the import layer separately in landed-cost models.
- Prepare for CBS now. Getting invoicing and credit tracking right for non-cumulative PIS/COFINS is the same discipline CBS will require from 2027.
FAQ
What are PIS and COFINS in Brazil? Two federal contributions levied together on a company’s gross revenue. They are Brazil’s main federal tax on turnover, separate from corporate income tax and from state/municipal ICMS and ISS.
What are the PIS/COFINS rates? 3.65% combined under the cumulative regime (no credits, typical for lucro presumido) or 9.25% combined under the non-cumulative regime (with input credits, typical for lucro real).
What decides which PIS/COFINS regime applies? Mainly your corporate income-tax method: lucro presumido companies are generally in the cumulative regime, lucro real companies in the non-cumulative regime, with some activity-based exceptions.
Do PIS and COFINS apply to imports? Yes. PIS/COFINS-Importação applies to imported goods (roughly 11.75% combined) and imported services (about 9.25%), on top of the other import taxes.
When do PIS and COFINS end? They are replaced by CBS under the tax reform. 2026 is a pilot year with a token offsetting rate; in 2027 CBS takes full effect and PIS and COFINS are extinguished.
📚 Related: Is There VAT in Brazil? IBS and CBS Explained and Lucro Real vs. Lucro Presumido.
Sources
Official sources reviewed for this brief: the cumulative-regime law (Lei 9.718/1998 — Planalto), the non-cumulative PIS and COFINS laws (Lei 10.637/2002; Lei 10.833/2003), the import law (Lei 10.865/2004), and the tax-reform framework replacing them with CBS (EC 132/2023; Lei Complementar 214/2025), with guidance from the Receita Federal. This is general information, not tax advice; confirm current rates and rules for your activity.