IBS (Tax on Goods and Services) does not apply to indirect export transactions, following a ruling by the 7th Public Treasury Court of the Federal District. The decision opens an important debate on the constitutional limits of taxation under the Tax Reform.

The dispute arises from the rules introduced by Complementary Law No. 214/2025. Under Article 82, the suspension of IBS on indirect export transactions is subject to compliance with certain requirements, including:

• certification under the Authorized Economic Operator (AEO) Program
• net equity exceeding BRL 1 million
• maintenance and digital submission of accounting records
• good standing with tax authorities

The collective writ of mandamus was filed by the Brazilian Council of Import and Export Trading Companies (Ceciex) and concerns indirect export transactions. In this structure, goods are sold domestically to an export trading company, which is then responsible for shipping the products abroad.

Ceciex argues that export tax immunity cannot be limited to direct exports only. Under Article 149-C, paragraph 2, of the Federal Constitution, extending such a restriction to indirect exports would violate the constitutional rationale for relieving export revenues from taxation. For taxpayers, those requirements imposed by the law undermine the constitutional logic of export tax relief and may exclude smaller companies from the suspension regime applicable to indirect exports.

The IBS Management Committee (CGIBS), by contrast, argues that transactions carried out by export trading companies fall outside the scope of the constitutional immunity. On that basis, it maintains that the regime is lawful. The Committee further argues that the requirements established by Article 82 of Complementary Law No. 214/2025 are legitimate control mechanisms designed to preserve tax collection and prevent fraud.

In reviewing the writ, the judge recognized that the constitutional purpose of export immunity is precisely to prevent the export of tax burdens and preserve the competitiveness of Brazilian products in foreign trade.

In this context, the decision emphasized that indirect exports are a legitimate mechanism for placing Brazilian goods in foreign markets. As a result, constitutional tax relief cannot be denied solely because of the operational structure adopted by the taxpayer.

Although the judgment is not yet final, it is relevant for companies engaged in indirect exports, particularly given the potential economic impact of IBS on these transactions.

The precedent also reinforces the trend toward litigation over the interpretation and application of the new rules introduced by the Tax Reform. It indicates that relevant constitutional and statutory discussions are likely to shape the first years of transition to the new tax system.

Glossary:

IBS: The Tax on Goods and Services, a new subnational value-added tax created under Brazil’s Consumption Tax Reform.

7th Public Treasury Court of the Federal District: A trial-level court in the Federal District that hears cases involving public treasury matters.

Tax Reform: Brazil’s reform of its consumption tax system, including the creation of IBS and CBS.

Complementary Law No. 214/2025: A law that sets out rules for the implementation of Brazil’s new consumption tax system.

Authorized Economic Operator (AEO) Program: A customs compliance certification program for companies that meet certain security and reliability standards.

Ceciex: The Brazilian Council of Import and Export Trading Companies.

IBS Management Committee (CGIBS): The body responsible for managing and coordinating the IBS under Brazil’s new consumption tax system.