Tax Reform moves forward with regulations for the CBS and IBS

Tax regulations mark an importante milestone in the transition to Brazil’s new tax system

 

A step that will guide taxpayers in Brazil on the operation and applicability of the taxes created under the Consumer Tax Reform. With the publication of Decree No. 12,955/2026 and CGIBS Resolution No. 6/2026, the Social Contribution on Goods and Services (CBS) and the Tax on Goods and Services (IBS) were regulated, respectively.

In addition to the aforementioned regulations, Joint Ordinance MF/CGIBS No. 7/2026 was also published, formally recognizing the provisions common to the CBS and the IBS in the regulations and reaffirming the harmonization between these taxes. It should be noted, however, that this recognition does not apply to any future amendments to the relevant regulations.

The regulations provide greater clarity regarding the new system and greater legal certainty for the national ecosystem by detailing guidelines pertaining to the IBS, which falls under the jurisdiction of states and municipalities, and the CBS, which falls under the jurisdiction of the federal government. These taxes were established by Complementary Law No. 214/2025.

In light of the regulations, taxpayers should be mindful of when deadlines begin and committed to ensuring their processes comply with the tax system.

The provisions address concepts, tax base, non-cumulative taxation, special regimes, and payment mechanisms, such as split payment. Here are some highlights:

 

Immediate points of attention

The payment of IBS/CBS for taxable events occurring from January 1 to December 31, 2026, is waived. However, the right to this waiver is valid only if the ancillary obligations set forth in the legislation are fulfilled.

As of January 1, 2026, taxpayers are required to issue electronic tax documents with the CBS and IBS highlighted individually for each transaction.

With the publication of the regulations on April 30, failure to comply with this requirement will subject the taxpayer to notifications and/or fines starting August 1, 2026.

 

Read more: Tax Reform: Federal Revenue Service and IBS Management Committee publish Joint Act on obligations relating to tax documents in 2026

 

It is also essential to ensure compliance with the required layouts for electronic tax documents.

 

Scope of application

The CBS and IBS apply to transactions involving the transfer of property (tangible, real estate, tangible, or intangible) and services. This includes transactions such as purchase and sale, lease, licensing, assignment, leasing, and the provision of services.

The decree lists exceptions, such as the transfer of assets between establishments of the same taxpayer, dividends, interest on equity, and services provided under an employment relationship.

 

Split payment

Split payment, a new tax collection model, will be implemented gradually and will apply to various payment methods, including Pix, boleto, credit cards, TED, and vouchers.

Companies should prepare for this new system by assessing its impact on their business model, systems, and cash flow.

 

Differentiated and Specific Regimes

The regulation provides preferential treatment for certain sectors:

 

Reduction to zero: medical devices, accessibility devices for people with disabilities, medications, vegetables, fruits, and eggs, services provided by non-profit scientific, technological, and innovation institutions, among others.

30% reduction in rates: applicable to professionals such as administrators, lawyers, accountants, engineers, agronomists, among others.

60% reduction in rates: applicable to education and health services, medical devices, food for human consumption, personal hygiene products, among others.

Sectors such as: fuels, financial services, health insurance plans, real estate, cooperatives, bars, restaurants, hotels, and others received special treatment.

 

Credit system and non-cumulative principle

Taxes follow the principle of full non-cumulativeness. Taxpayers may claim IBS and CBS credits on purchases of goods and services, provided they are supported by tax documents.

When offsetting, credits may be used to offset liabilities from the same period or refunded within specific timeframes.

 

Implementation

The tax reform will be implemented gradually, from 2026 to 2032, and will take full effect in 2033. Taxpayers will therefore need to adapt to the system over time, incorporating the new requirements into their operational routines.

The IBS replaces the ICMS and ISS, while the CBS replaces the PIS and Cofins. Together, they form the VAT (Value Added Tax), which will be levied on a non-cumulative basis and at the point of destination.

 

What will the IBS and CBS rates be?

The general rates will be set by a subsequent resolution of the Brazilian Senate.

 

Tax support for the transition

DPC’s tax team assists clients in analyzing the effects of the Tax Reform, adapting processes, and providing guidance on establishing best practices in this new context. Count on our support and begin a smooth transition: dpc@dpc.com.br.