Non Cumulative Regime and the Restriction on the Deduction of IBS and CBS Credits on Acquisitions of Goods and Services of Personal Use or Consumption

what to expect ? An Analyses in Light of the Experience of VAT in Portugal and VAT in Spain

Abstract

The article examines the restriction on the appropriation of IBS and CBS credit in the acquisition of goods for personal use or consumption, provided for in art. 156-A, paragraph 1, item VIII, of the Constitution, and whose regulation is provided for in Complementary Bill no. 68, 2024. The article analyzes the legislation of Portugal and Spain on value added tax, specifically the rules that deal with non-cumulative regime and restrictions on the use of credit on goods for personal use or consumption. The experience of these countries demonstrates that the restriction generates disputes between tax authorities and taxpayers. The article proposes that Brazil should adopt standards similar to those that deal with the deductibility on the calculation of income tax of expenses necessary to the activity and to maintain the source of income, as well as standards that require the taxation of operations carried out for the benefit of employees, partners or administrators of the legal entity and not for the benefit of the economic activity development. It is noted that this solution was, in part, met by Complementary Bill no. 68, 2024, with room for litigation and, as a result, an affront to neutrality and non-cumulative regime.