Brazil’s 2028 tax reform phase will focus on stabilizing CBS and Selective Tax (IS) after their 2027 launch and preparing for IBS from 2029. Businesses and software providers should use this period to adjust pricing, cash flow, tax credits, reporting, ERP systems, and compliance tools before the more complex transition begins.
Brazil Tax Reform: 2028 Set as Crucial Stabilization Phase Ahead of Gradual IBS Rollout
Public
Brazil
Author: Ljubica Blagojević
Category:
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Content accuracy validation date:
09.07.2026
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Brazil’s transition to the new tax model will remain a major operational challenge after the 2027 introduction of CBS and the Selective Tax (IS). The year 2028 will not be a pause, but a stabilization and adjustment phase, focused on analyzing real fiscal data, identifying operational issues, and preparing for the next stage of the reform.
In 2028, the government and private sector will assess the actual economic impact of CBS and IS, including effects on revenue, inflation, consumer behavior, and sector competitiveness. Based on this analysis, authorities may issue new regulations, instructions, or decrees to clarify unclear rules and correct practical distortions. The IBS Management Committee is also expected to refine procedures and address taxpayer questions before IBS implementation begins.
For businesses, the reform’s impact will be especially visible in pricing, cash flow, and compliance. Sectors with long supply chains may benefit from broader credit recovery, while service businesses with fewer credits may need to review margins and pricing. The Selective Tax may also affect consumer prices and demand for certain products.
Cash-flow management will become more important because tax credits depend on effective tax collection in earlier stages of the supply chain. Companies will need to monitor supplier compliance to protect their credit rights. The cashback mechanism for low-income families will also need practical testing and technological adjustment to avoid creating excessive operational costs for retailers.
From an IT and compliance perspective, 2028 will require companies to stabilize CBS and IS reporting while preparing systems for the gradual introduction of IBS from 2029 and the future coexistence with ICMS and ISS during the transition.
For software houses, the strategic focus will shift from implementation to optimization. This includes fixing post-go-live issues, improving system stability, refining user experience, and using real CBS and IS data to develop tax analytics and BI tools. These tools can help clients understand their effective tax burden and make better business decisions.
Software providers should also begin architectural planning for the next phase of the reform. From 2029 to 2032, IBS rates will gradually increase while ICMS and ISS are reduced. In 2032, ICMS and ISS will be eliminated, and accumulated ICMS credits will be paid over 240 months. By 2033, Brazil’s new Dual VAT model, based on CBS, IBS, and IS, is expected to be fully implemented.
Overall, 2028 will be a critical year for testing, correcting, and optimizing the new tax environment. Companies, accountants, and software providers should use this period to improve compliance processes, strengthen system architecture, and prepare for the more complex IBS transition.
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