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Brazil VAT (CBS/IBS) guidelines

FACTSHEET
Country codeBR
Tax nameCBS (Contribuicao sobre Bens e Servicos) + IBS (Imposto sobre Bens e Servicos) — replacing ICMS, ISS, PIS, COFINS and IPI
Tax AuthorityReceita Federal do Brasil (CBS, federal); Comite Gestor do IBS — CGIBS (IBS, state/municipal)

Overview​

Brazil is mid-transition from a fragmented indirect-tax stack — ICMS (state tax on goods and some services), ISS (municipal services tax), PIS/COFINS (federal turnover contributions) and IPI (federal excise on manufactured goods) — to a dual VAT: a federal CBS (Contribuicao sobre Bens e Servicos) and a state/municipal IBS (Imposto sobre Bens e Servicos), alongside a Selective Tax (Imposto Seletivo, IS) on specific goods. The reform was created by Emenda Constitucional 132/2023 (20 December 2023) and regulated by Lei Complementar 214/2025 (16 January 2025), which also created the IBS Management Committee; Lei Complementar 227/2026 (13 January 2026) further institutes the Comite Gestor do IBS (CGIBS) and its administrative tax process. [1]

Source snapshot — EC 132/2023 and LC 214/2025 in the official reform milestones Source snapshot captured 2026-07-20 — original

CBS is administered by Receita Federal do Brasil; IBS is administered by the Comite Gestor do IBS (CGIBS). Implementation is carried out under the Federal Revenue's Consumption Tax Reform Program (Portaria RFB no 501/2024), with a CBS pilot instituted by Portaria RFB no 549/2025. [1]

CNPJ and registration​

  • CNPJ (Cadastro Nacional da Pessoa Juridica) is Brazil's national taxpayer-registration number for legal entities, administered by Receita Federal do Brasil. [1]
  • The obligation to register for a CNPJ is set out in Chapter II (articles 3 and 4) of Instrucao Normativa RFB no 2.119, of 6 December 2022. [2]
  • New from July 2026: individual persons (pessoas fisicas) who are taxpayers of CBS and/or IBS must also register for a CNPJ. Receita Federal is explicit that this registration does not convert the individual into a legal entity — it exists solely to facilitate CBS/IBS assessment. [3]

Source snapshot — Individuals who are CBS/IBS taxpayers must register for a CNPJ from July 2026 Source snapshot captured 2026-07-20 — original

  • Businesses register through REDESIM, the national integrated business-registration system (viability check, tax inscription, then municipal/state licensing), which works together with the state Juntas Comerciais and DREI. [4]

Current rate picture and the CBS/IBS transition timeline​

The reform phases in over several years. Confirmed milestones: [1]

PeriodWhat applies
2026 (test year)Combined 1% test rate — CBS 0.9% + IBS 0.1% — charged and shown on qualifying electronic fiscal documents. The amount is offset against the taxpayer's PIS/COFINS liability for the same period; a contributor who issues fiscal documents observing the current rules is dispensed from actually paying CBS/IBS.
2027-2028PIS and COFINS are extinguished; IPI is reduced to zero (except for goods produced in the Manaus Free Trade Zone / Zona Franca de Manaus); the Selective Tax (Imposto Seletivo) is introduced. CBS begins to be charged at its reference rate less 0.1 percentage point — a substantial step up from the 0.9% test rate — while IBS remains at the 0.1% test rate.
2029IBS phases in at 10% of the combined ICMS+ISS+IBS burden, with ICMS/ISS reduced correspondingly.
2030IBS share rises to 20%.
2031IBS share rises to 30%.
2032IBS share rises to 40%.
2033ICMS and ISS are fully extinguished; CBS, IBS and the Selective Tax become Brazil's consumption-tax system.

Source snapshot — CBS/IBS transition timeline and the 2026 combined 1% test rate Source snapshot captured 2026-07-20 — original

This timeline is sourced directly from Receita Federal's official reform-explainer page; the eventual reference rates for CBS and IBS beyond the 2026 test year had not been fixed by law as of this guide's last update, so they are not stated here.

Registration thresholds​

There is no turnover floor for ordinary CNPJ registration — that obligation follows from being classified as a CBS/IBS taxpayer, per Instrucao Normativa RFB no 2.119/2022 (arts. 3-4). [1] The most recent extension of this obligation is to individuals (pessoas fisicas) who are CBS/IBS taxpayers, who must register for a CNPJ from July 2026 (see CNPJ and registration, above). [2]

But a genuine minimum-turnover exemption does exist for CBS/IBS itself. Under article 26 of Lei Complementar 214/2025, a natural person whose gross revenue is below 50% of the MEI ceiling — currently around R$40,500 a year, half of the R$81,000 MEI limit — is a "nanoempreendedor": not a CBS/IBS taxpayer at all, not required to formalise, and not liable to collect IBS or CBS. Separately, MEI retains its differentiated treatment, with no change to its obligations in 2026. [3]

E-invoicing status​

Brazil has a long-standing, broad mandate for standardized electronic fiscal documents, including NF-e (goods), NFC-e (consumer sales), NFS-e (services), CT-e (transport), NFCom (communications), NF3e (electricity) and BP-e (passenger transport). [1]

As part of the consumption tax reform, these documents must show CBS and IBS itemized per operation from 1 January 2026. [1] The underlying NF-e/NFC-e technical layout is being updated under Nota Tecnica 2025.002-RTC, maintained jointly by the Comite Gestor do IBS and ENCAT, to add the IBS, CBS and Imposto Seletivo (IS) fields, events and validation rules the reform requires. [2]

Recent changes​

  • 2026-08-01 — Under Joint Act RFB/CGIBS No. 01/2025, penalties begin for omitting the mandatory IBS/CBS fields from electronic fiscal documents (NF-e and others) during the 2026 pilot (combined 1% test rate: CBS 0.9% + IBS 0.1%). (Comite Gestor do IBS) — see issue
  • 2026-07-01 — Receita Federal confirmed that individual persons (pessoas fisicas) who are CBS/IBS taxpayers must register for a CNPJ from July 2026; the registration does not convert them into a legal entity. (Receita Federal do Brasil) — see issue
  • 2026-05-20 — Version 1.40 of Nota Tecnica 2025.002-RTC for NF-e/NFC-e added the IBS, CBS and Imposto Seletivo (IS) groups, fields, events and validation rules for the consumption tax reform; the mandatory IBS/CBS group is required in production for CRT 3 (Regime Normal) taxpayers from 3 August 2026, after which NF-e/NFC-e issued without those fields are rejected. (Portal da Nota Fiscal Eletronica / Receita Federal — Comite Gestor do IBS / ENCAT) — see issue
  • 2026-04-30 — Decreto No. 12.955/2026 regulating the federal CBS, and the companion CGIBS Resolucao No. 06/2026 setting common CBS/IBS rules, were published in the Diario Oficial da Uniao, establishing fiscal-document formats, crediting rules, ancillary obligations and special regimes under LC 214/2025; penalties for ancillary-obligation failures apply from 1 August 2026. (Palacio do Planalto (gov.br)) — see issue

Frequently Asked Questions​

What is Brazil's CBS/IBS reform replacing?​

Emenda Constitucional 132/2023 (20 December 2023) and Lei Complementar 214/2025 (16 January 2025) replace ICMS, ISS, PIS, COFINS and IPI with a dual VAT: CBS, a federal tax administered by Receita Federal do Brasil, and IBS, a state/municipal tax administered by the Comite Gestor do IBS (CGIBS), plus a Selective Tax (IS) on specific goods. [1]

What is the 2026 test rate for CBS and IBS?​

CBS at 0.9% and IBS at 0.1% (combined 1%), shown on qualifying electronic fiscal documents. The amount is offset against the taxpayer's PIS/COFINS liability for the same period, so a contributor who follows the current rules has no real additional CBS/IBS payment in 2026. [1]

Do individuals (pessoas fisicas) need to register for a CNPJ in Brazil?​

Only if they are taxpayers of CBS and/or IBS. From July 2026, such an individual must register for a CNPJ, but this registration is purely to facilitate CBS/IBS assessment — it does not convert the individual into a legal entity. [1]

How long does Brazil's ICMS/ISS-to-IBS transition take?​

The transition runs from the 2026 test year to full replacement in 2033. In 2027-2028, PIS and COFINS are extinguished, IPI is zeroed (except for goods from the Manaus Free Trade Zone), and the Selective Tax is introduced. IBS's share of the combined ICMS+ISS+IBS burden then rises in fixed steps — 10% (2029), 20% (2030), 30% (2031), 40% (2032) — before ICMS and ISS are fully extinguished in 2033. [1]

Is e-invoicing mandatory in Brazil?​

Yes. Brazil already requires standardized electronic fiscal documents — NF-e, NFC-e, NFS-e, CT-e, NFCom, NF3e and BP-e among them. [1] Under the reform, these documents must show CBS and IBS itemized per operation from 1 January 2026, and the NF-e/NFC-e layout is being updated under Nota Tecnica 2025.002-RTC to add the required IBS/CBS/Imposto Seletivo fields. [2]

To verify a Brazilian CNPJ, see our Brazil CNPJ validator.