Brazil’s tax reform: CBS and IBS testing rules in 2026

Brazil’s tax reform is in its testing phase in 2026. The model sets trial rates of 0.9% for the federal CBS and 0.1% for the state and municipal IBS. However, this does not mean every business must pay both taxes this year.

Tax reform: when the 2026 payment exemption applies

According to Brazil’s Federal Revenue Service, taxpayers who meet the reporting and other ancillary obligations set out in law are exempt from paying CBS and IBS in 2026. Thus, the trial period allows businesses to adapt documents and systems.

Where payments are due, the law provides rules for offsetting them against PIS and Cofins. Therefore, businesses should not assume that payments automatically offset every existing tax.

Electronic invoices and transition rules

The changes affect invoicing systems, records and tax fields. However, deadlines and requirements depend on the document and the applicable rules.

In a notice published on August 1, 2026, the Revenue Service and the IBS Management Committee announced more flexible validation rules. According to the notice, missing CBS and IBS fields would not cause rejection of the listed electronic tax documents.

Consequently, businesses should check the current technical guidance. Relaxing a validation rule does not, by itself, remove all tax reporting obligations.

Tax reform timeline through 2033

In 2027, CBS replaces PIS and Cofins. In addition, the Selective Tax begins. IPI rates fall to zero for most products, with exceptions intended to protect the Manaus Free Trade Zone.

Meanwhile, IBS gradually replaces ICMS and ISS from 2029 to 2032. The new model takes full effect in 2033, when ICMS and ISS end. These taxes therefore do not all disappear in 2027.

Editorial update: reviewed on September 18, 2026, to clarify the payment exemption, document rules and transition timeline.

Sources: Federal Revenue Service — tax transition and its notice on electronic tax documents (in Portuguese).