Brazil's tax reform simplifies its system by replacing five taxes with a Dual VAT model (CBS and IBS) and introduces a Selective Tax. It aims for transparency, reduced bureaucracy, and requires businesses to update electronic tax systems by 2026.
Brazil Tax Reform Brings Major E-Invoicing and Compliance Changes
Public
Brazil
Author: Ivana Picajkić
Category:
General information
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483
Content accuracy validation date:
25.06.2026
Content accuracy validation time:
08:23h
Brazil is introducing a major tax reform to simplify its complex tax system.
The reform replaces five existing taxes with a new Dual VAT model. The new system will include CBS, a federal tax, and IBS, a state and municipal tax. A third tax, called the Selective Tax, will apply to products considered harmful to health or the environment.
The goal of the reform is to make taxation simpler, more transparent, and easier to manage for businesses. It should also reduce bureaucracy and improve tax control.
The transition will be gradual. CBS collection is expected to start in 2027, while IBS will be introduced gradually from 2029. The old taxes are expected to be fully replaced by 2033.
From August 2026, businesses will need to include CBS and IBS information in electronic tax documents. This means that companies will have to update their e-Invoicing systems, ERP systems, tax rules, validations, and document layouts.
The reform will affect many electronic fiscal documents, including e-Invoices, e-Receipts, e-Invoices for services, and others.
Brazil is also introducing technical updates, such as new fields for CBS and IBS, split payment documentation, changes to recipient acknowledgement deadlines, and the future use of alphanumeric CNPJ numbers for new company registrations.
For businesses, the reform is not only a tax change. It is also a major technology and compliance change, requiring system updates, process reviews, and preparation for new reporting and validation rules.
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