Brazil’s tax reform marks a pivotal shift to modern, efficient and transparent tax infrastructure. While upcoming changes are set to simplify long-term tax structure, organizations must navigate immediate pressures across Source-to-Pay (S2P), Enterprise Resource Planning (ERP), finance, and compliance functions.
Brazil will replace PIS, Cofins, IPI, ICMS, and ISS with two unified taxes:
Both levied under common rules with destination-based taxation and full input credits.
Symbolic testing (0.9% CBS, 0.1% IBS)
No actual tax paid
CBS begins to replace PIS/Cofins/IPI
Actual collection starts
Gradual replacement of ICMS and ISS by IBS
Phased transition continues
Full implementation of CBS and IBS
Full phase-out of old taxes
Full transition planned to go into effect by 2027-2033, with parallel operation of legacy and new regimes during the transitional phase.
NFe, NFCe, and other document formats are updated with new fields and validation rules for CBS, IBS, and the Selective Tax (IS).
Starting January 2026:
Under this model, when a transaction is paid, the tax portions (IBS and CBS) are automatically separated from the payment. The buyer pays the tax amounts directly to the tax authorities, while the remainder is paid to the supplier.
There are three planned modes based on taxpayer profiles:
Used in B2B transactions. Payment processors compute the correct tax amount (accounting for credits) and remit it directly to the tax authorities at the point of payment.
For purchasers not registered under CBS/IBS (e.g., Simples Nacional). A pre‑set percentage is withheld and remitted, simplifying compliance.
When automatic split isn't possible, the purchaser collects and remits tax to the tax authorities. This method is still under discussion and not fully defined. In this method, the ERP and S2P systems must be configured to calculate and apply split payments, ensuring the correct withholding of CBS and IBS tax amounts at the time of invoice settlement.
Supplier has IBS/CBS credits
Buyer pays full amount and supplier receives the total.
Supplier lacks credits or undetermined
Buyer triggers withholding and tax withheld to authorities. Remainder goes to supplier.
Dual-VAT Logic Integration
Adapt procurement, PR/PO, invoice processes, and support the ERP transition of tax flows to CBS/IBS logic, including split-payment and withholding tax configuration in S2P, with full integration to the ERP for payment.
Master Data Readiness
Audit and migrate tax codes, contact files, and CNPJ formats for seamless integration.
System Integration & Testing
Develop middleware, automate schema mapping, and test transitions across legacy and new regimes.
Training & Change Management
Train finance, supply chain, and IT teams on dual tax handling across S2P workflows.
Hypercare & Support
Provide monitoring and support during go-live periods and transition phases to mitigate disruptions.
Optis Consulting brings hands-on experience in configuring source-to-pay workflows, updating tax requirements and split payment requirements in your organization's source-to-pay, and supporting organizations through the CBS/IBS rollout. Whether you operate with numeric or alphanumeric CNPJs, need parallel regime processing, or require seamless invoice compliance, Optis helps ensure your S2P systems, teams, and operations remain compliant and operational through the transition.
Disclaimer: The information presented on this webpage is for educational and informational purposes only. Optis Consulting is a technology and Source-to-Pay systems advisory firm. While we closely monitor Brazil’s tax reform (CBS/IBS) and help organizations prepare their S2P environments accordingly, we do not provide tax or legal advice, nor do we interpret tax legislation.
This content reflects our understanding of system-level impacts based on publicly available resources and collaboration with S2P platform and trusted tax partners.
We recommend all organizations consult with qualified tax or legal advisors to assess their specific obligations under CBS/IBS based on industry, entity classification, and jurisdiction.
Optis Consulting supports Coupa, Ivalua and Ariba customers in configuring, optimizing, and future-proofing their systems for compliance, but does not assume responsibility for legal or fiscal determinations.
