Tax reform transition in Brazil brings significant challenges and opportunities for companies. From January 1st, 2026, businesses will be required to calculate and display the IBS/CBS values — and the Selective Excise Tax when applicable — directly on their electronic tax documents. Consequently, fiscal and financial management systems (ERP, SAP, and others) must be updated to meet this new requirement. Otherwise, non-compliance will lead to the automatic rejection of invoices and, as a result, to serious impacts on turnover and cash flow.
In addition, 2026 will serve as a testing period. Therefore, companies will only need to inform IBS/CBS/IS values without mandatory payment. However, payment will be optional and allowed only for taxpayers who comply with ancillary obligations. Since these rules have not yet been fully enacted, it is strongly recommended to monitor legislative updates closely. Furthermore, companies under differentiated regimes will need to file specific declarations (DERE).
Another essential aspect of the tax reform transition is the management of accumulated credits and tax benefits. Companies must evaluate credit balances that can be used during the transition and identify tax benefits that will be extinguished. This step is crucial, as both measures directly affect pricing strategies with customers, suppliers, and stakeholders.
Moreover, the introduction of dual VAT, combined with non-cumulative taxation, destination-based principles, and external calculation, will deeply transform value chains. Thus, not only fiscal departments but also strategic business areas must prepare to adapt.
Finally, the adoption of the split payment system will further impact companies’ financial operations. Through this mechanism, electronic payments will separate the tax amount — directly transferred to the authorities — from the seller’s share. As a result, cash flow may be strongly affected, demanding greater control and planning.
