Brazil Sets 3-Month Penalty-Free Transition for New IBS/CBS Consumption Taxes

Overview

• The Federal Revenue Service and the IBS Governing Committee published a joint act on December 23 in the Official Gazette that takes effect on January 1, 2026.
• The three-month adaptation period starts only after the IBS and CBS regulations are published, with penalties applying from the fourth month.
• Authorities described 2026 as a year for learning, testing and calibration to reduce legal uncertainty as taxpayers adjust invoice fields and routines to the new model.
• The revenue service indicated that mandatory completion of the new tax fields would begin after the three-month window, with timing dependent on when the regulations are issued.
• On December 15, the Chamber approved PLP 108/2024 establishing an autonomous IBS Governing Committee in Brasília to administer the tax that replaces ICMS and ISS and to manage roughly R$1 trillion per year.