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Taxes

Brazil — Tax: Vat

Brazil is replacing its consumption taxes, including the state ICMS and municipal ISS, with a dual VAT: the CBS (federal) and the IBS (states and municipalities). The model was created by Constitutional Amendment 132/2023 and regulated by Complementary Law 214/2025, with a later amendment in Complementary Law 227/2026. Transition is gradual and completes in 2033. In 2026 the CBS and IBS are a test year: electronic invoices must show test rates of 0.9% for the CBS and 0.1% for the IBS, but the amounts are informational and not collected for taxpayers who meet their ancillary obligations; from 3 August 2026, electronic invoices for regular-regime companies cannot be issued without the IBS and CBS fields. The standard rate has not been confirmed in these official pages.

VerifiedGovernment / official sourceReceita comitê gestor do IBS — Reforma Tributária do Consumo (EC 132/2023, LC 214/2025)Last reviewed: 2026-10-23

Key facts

  • Constitutional Amendment 132/2023 created the dual VAT (CBS federal, IBS states and municipalities); Complementary Law 214/2025 regulates it.
  • The CBS and IBS replace the ICMS and ISS (among other taxes); the transition completes in 2033.
  • 2026 is a test year with rates of 0.9% (CBS) and 0.1% (IBS) shown on invoices; the amounts are informational and not collected for compliant taxpayers.
  • From 3 August 2026, electronic invoices of regular-regime companies must fill the IBS and CBS fields.
  • The standard rate is not confirmed in these official pages.

Steps

  1. Registering for ICMS and ISS — The process of registering for ICMS and ISS is not well-documented online, and it's recommended to consult with a tax professional or the Brazilian tax authority (Receita Federal) for guidance.

Common mistakes

  • Treating 2026 test rates as taxes due — they are informational for taxpayers who meet their ancillary obligations.

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