The Limits of the Union’s Competence Following the Tax Reform

a Critical Analysis of the Material Aspects involving the Concept of Goods and Services for the Purposes of IBS and CBS Taxation

Abstract

With the implementation of the consumption tax reform in Brazil through Constitutional Amendment No. 132/2023, the concept of shared jurisdiction was introduced among the States, Federal District, and Municipalities for the establishment of the tax on goods and services (IBS), while maintaining the Union’s exclusive jurisdiction to create the contribution on goods and services (CBS) to replace the current social security contributions (Cofins) and the social integration program contribution (PIS). This new allocation of taxing powers, combined with the inclusion of new taxable events through the use of a broad term (“goods and services”), raises questions about the breakdown of the former rationale behind the rigid distribution of competencies. This article proposes an analysis of how taxing powers are distributed under Constitutional Amendment 132/2023 and how the creation of IBS and CBS through Complementary Law 214/2025 may affect taxable events previously allocated in the Constitution. Based on a bibliographic and normative review, the study examines whether the enactment of Constitutional Amendment 132/2023 restructured the granting of taxing powers and how the introduction of these new taxes impacts the federal principle. The conclusion reached is that the rigid allocation of taxing powers was not altered by the new constitutional framework, making it impossible for the new consumption taxes to invade exclusive jurisdictions established by the constitutional text.