Brazil’s new dual VAT is now operational. Here is what it means.
The federal government has published the long-awaited regulatory frameworks for Brazil’s CBS (federal VAT) and IBS (state and municipal VAT). Both entered into force on 30 April 2026. Penalties begin on 1 August 2026.
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For decades, Brazil had five different consumption taxes. Constitutional Amendment 132/2023 began replacing them with two. The regulations have now arrived.
Constitutional Amendment 132/2023 launched the most comprehensive overhaul of Brazil’s consumption tax system in more than three decades: replacing PIS, COFINS, IPI, ICMS and ISS with a dual VAT, the CBS (federal) and the IBS (state and municipal).
Complementary Law 214/2025 created the legal framework for both taxes. Decree 12,955/2026 supplies the regulatory detail for CBS; Resolution CGIBS 6/2026 does the same for IBS. Both entered into force simultaneously on 30 April 2026.
CBS and IBS share a common Book I covering definitions, taxable events, location rules, tax base, taxpayers, split payment and credits, with tax-specific rules in each instrument’s own Book II. The same operational logic applies to both taxes simultaneously, an error in invoice parameterisation, a misclassified mixed supply, or a missed digital platform registration affects both CBS and IBS at once, doubling exposure.
A phased replacement running to 2033
A deliberately broad taxable event and what falls outside it
Article 4 of the Decree establishes the general rule: CBS applies to all onerous operations involving goods or services, sale, leasing, licensing, concession, loan for consideration, barter, real estate rights and service provision. Definitions are identical across both instruments.
The mechanism that changes how sellers receive money
Articles 28 to 35 segregate CBS and IBS from the commercial payment at the point of financial settlement, remitted directly to the RFB by the payment provider. The seller receives only the net commercial amount. For most 2026 transactions, the combined withholding is 1.0% (0.9% CBS + 0.1% IBS).
A simplified procedure applies a pre-set withholding percentage but generates no input credits; only the standard procedure creates a direct credit linked to the invoice.
Credit lifecycle: to appropriate (contingent) → appropriated (available for offset or refund) → utilised (set off or refunded).
Late payment: 0.33% per day, capped at 20%, plus Selic interest. Each tax assessed and penalised independently.
Export-intensive businesses can file surplus credit refund claims by the last business day of the following month. CBS refunds via RFB; IBS refunds via the CGIBS distribution system.
Two regulatory provisions that warrant close attention
The IBS Regulation blocks accumulated credit refunds where the taxpayer holds an IBS debt with suspended enforceability pending an administrative dispute. This restriction is of doubtful legality: Complementary Law 214/2025 contains no such limitation, the STF has held that suspended-enforceability debts cannot be deducted from refunds, and the CBS Regulation has no equivalent restriction.
The CBS Regulation requires a formal credit utilisation request before accumulated PIS/COFINS credits can offset CBS liabilities. Whether this procedural gate delays what should be an immediate right of offset depends on implementing rules still to be published.
Destination-based location rules: identical across both taxes
Six things every company must do in 2026
The Decree and Resolution establish operational rules for a tax that applies to virtually everyone. Here is what that means before 1 August 2026.
Who is outside the standard regime? What is still pending?
Six instruments that must be read together
| Instrument | Content | Status |
|---|---|---|
| Constitutional Amendment 132/2023 | Authorised the reform; established the destination principle; created IBS and CBS at constitutional level. | In force |
| Complementary Law 214/2025 | Created CBS and IBS; established rates, credits, exemptions and the CGIBS. | In force |
| Complementary Law 227/2026 | Completed the reform; ICMS credit transition provisions and sector-specific rules. | In force |
| Decree 12,955/2026 | Regulatory rules for CBS and shared provisions: definitions, taxable event, location, base, taxpayers, platforms, split payment, credits. | In force 30 Apr 2026 |
| Resolution CGIBS 6/2026 | Establishes the IBS Regulation, mirroring Decree 12,955/2026’s structure. | In force 30 Apr 2026 |
| Joint RFB/CGIBS acts | Implementing rules for split payment, market value methodology, credit procedures, invoice standards and Simples Nacional IBS track. | Pending |
Operating in Brazil after 30 April 2026?
Whether you’re reviewing invoice systems, assessing digital platform exposure or planning split payment cash flow, early advice avoids errors that compound across CBS and IBS simultaneously.
This page is a summary only and does not constitute legal advice.
Brazilian lawyers for foreign companies, investors and law firms.