Brazil Begins Tax Reform Test Year as CBS and IBS Appear on Invoices

Overview

• Companies must highlight the new federal CBS and state‑municipal IBS on electronic invoices starting now, feeding data into the updated system without an immediate net tax increase.
• Test rates of 0.9% for CBS and 0.1% for IBS apply in 2026, and the amounts are deducted from PIS/Cofins payments to keep the overall tax burden unchanged this year.
• By midday on Jan. 2, 1.7 million invoices had already been issued in the new format, according to the Federal Revenue Service.
• The tax authority and the IBS management committee postponed automatic fines for incomplete CBS/IBS fields until the first day of the fourth month after regulations are published, giving firms a short adaptation window.
• Businesses face operational risks as assisted calculation and future split payment tighten credit rules, exposing buyers to suppliers’ compliance failures, while industry leaders warn of legal uncertainty and small‑business vulnerabilities.