Tax Pills: The 5 Changes Every Producer Needs to Understand

Tax reform is a topic that tends to be daunting—and for good reason. There are hundreds of articles, new acronyms, and overlapping deadlines. But when looking specifically at agribusiness, it's possible to summarize the most relevant transformations into five structural changes that every producer needs to understand.

First change: end of state patchwork.

Today, taxation on agriculture is a mosaic. The ICMS (state sales tax) on soybean sales has one treatment in Mato Grosso, another in Goiás, and yet another in Paraná. There are agreements between states, protocols, and exemptions negotiated on a case-by-case basis. This system has generated decades of insecurity and competitive inequality between regions. The IBS (Integrated Sales Tax) puts an end to this: a national rule, applied uniformly throughout the territory. The corn producer in Tocantins and the corn producer in Rio Grande do Sul will operate under the same tax rules.

Second change: reduced tax rate for unprocessed products.

Article 212 of the IBS Regulation establishes a 60% reduction in the IBS rate on the supply of agricultural, aquaculture, fishing, forestry, and extractive plant products when in their natural state. The same applies to the CBS, according to the corresponding article in its regulation. To understand the practical impact: if the full reference rate is approximately 9.6%, the product in its natural state will be taxed at approximately 4.4%. The processed, industrialized product will be taxed at the full rate.

Third change: inputs also with reduced tax burden.

Fertilizers, certified seeds, registered pesticides, veterinary medicines, and other inputs listed in Annex IX of Supplementary Law No. 214/2025 also have a 60% reduction in the tax rate. Furthermore, the regulation provides for deferral of payment when the purchase of the input is made between taxpayers under the regular regime—which improves the cash flow of the operation even before the product is sold.

Fourth change: the R$ limit of 3.6 million for individual producers.

The legislation created an objective and national criterion for individual rural producers: those who invoice below R$ 3.6 million per year from rural activity are not subject to IBS and CBS contributions. They do not collect or declare taxes. However, they must issue tax documents. Above this limit—or by voluntary choice—the producer enters the regular debit and credit system. This limit will be adjusted by the IPCA (Brazilian inflation index) starting in January 2027.

Fifth change: presumed credit for those who buy from non-taxpaying producers.

This is perhaps the most sophisticated change in the agricultural reform. When a meatpacking plant, cooperative, or trading company buys from a non-taxpaying individual producer, the buyer begins to accumulate a presumed credit—calculated by a formula defined annually by the federal government. This ensures that the tax paid in previous stages of the chain is not lost and makes the non-taxpaying producer's product more commercially attractive.

The reform is neither good nor bad for agribusiness in a general sense. For those who work with raw products and processed inputs, the tax burden tends to decrease. For those who process and industrialize, the rules change and planning becomes essential.

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