Brazil has approved a second law that operationalises its dual VAT system, introducing a federal CBS tax of 8.8% and a state/municipal IBS tax of 17.7% and replacing PIS, Cofins, ICMS and ISS. The legislation establishes a national governance body for IBS, provides sector‑specific rules, and sets a phased transition from 2026 to 2033.
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Fiscal Solutions · 4 days ago
Brazil's new IBS/CBS/IS tax system now treats advance payments as taxable events, requiring businesses to issue a Debit Invoice (NF-e type 06) and report tax in the payment period. The final invoice must reference the advance payments via <gPagAntecipado> to offset tax already paid and avoid double taxation. ERP systems must support advance-payment tracking and the new invoicing requirements.
LinkedIn · 7 days ago
Brazil’s new Technical Notes mandate that invoices and payments be linked under the split payment framework, requiring integration between electronic tax documents (DF‑e) and payment data. The system will be tested from 6 April 2026 and go live on 4 May 2026, with XML and invoicing processes needing updates to include transaction data for automatic withholding of IBS and CBS.
VatCalc · 19 days ago
Brazil will roll out an intelligent split payment system for VAT starting 1 January 2026 to curb fraud. Pilot testing begins on 6 April 2026, with the production version following on 4 April. The mechanism requires payment service providers to verify supplier VAT credits before transferring funds, and buyers can only claim credits after the supplier has paid the tax.
LinkedIn · 28 days ago
Brazil’s new dividend withholding tax (WHT) has been in force for nearly a month, but questions remain about its application. The December 16, 2025 Q&A confirms that dividends paid to foreign governments, sovereign funds and social‑security‑benefit managers are exempt, and that the exemption also covers entities wholly owned by exempt investors. However, in structures where a Brazilian entity is held by a foreign holding company only partially owned by exempt investors, the exemption may not apply, potentially subjecting dividends to full WHT.
VatCalc · about 1 month ago
Brazil’s 2026‑2032 VAT reform introduces a targeted “Cashback” mechanism that refunds part of the new CBS and IBS taxes to low‑income families. The scheme will reimburse 100% of CBS and 20% of IBS on essential utilities (draft figures) and is expected to start in 2027 with a phased rollout. Refunds will be transferred electronically to families’ bank accounts linked to their CPF.
Sovos · about 1 month ago
Complementary Law No. 227/2026, published on 13 January 2026, formally establishes the Management Committee of the Goods and Services Tax (CGIBS) and sets out governance, litigation, and revenue distribution rules for Brazil’s new IBS tax. The law does not impose immediate obligations on taxpayers but signals a shift to a centralized, standardized administration that will affect audits, enforcement, and data cross‑checking in the future.