Brazil’s Tax Reform, established by Constitutional Amendment No. 132/2023 and regulated by Complementary Law No. 214/2025, replaces five consumption taxes — PIS, Cofins, IPI, ICMS and ISS — with a dual VAT model: the CBS, federal, and the IBS, shared between states and municipalities. For the small and medium service business, what matters is not the acronym. It is how money starts entering — and leaving — your cash.
Three principles that change the game
- Destination-based collection. The tax is now owed where the service is consumed, not where the company is based. This ends part of the fiscal war, but requires attention to where your clients are.
- Full non-cumulativity. Everything you pay in IBS/CBS along the chain becomes a credit to offset. Well used, it lowers the burden; poorly recorded, it becomes lost money.
- Split payment. The tax tends to be separated at payment, going straight to the tax authority, so that only the net amount reaches your account.
The invisible risk: confusing revenue with tax
Today, the full amount passes through the company’s account before the tax is remitted — and that passage inflates the sense of available cash. When split payment takes effect, the net amount arrives smaller and more predictable. A business that does not separate tax from revenue plans with a number that is not its own, and finds the hole at closing. The problem is rarely the rate: it is the lack of visibility.
The credit nobody captures
Non-cumulativity only works if there is a record. Every invoice for inputs, software, rent or services taken can generate IBS/CBS credit. Without reconciliation between invoices and payments, part of that credit is simply not claimed — and the business overpays tax without noticing. This is a new leak the reform creates for those without control.
The calendar that matters
- 2026 — test phase, with CBS at 0.9% and IBS at 0.1%, with no effective collection.
- 2027 — CBS at its full rate; end of PIS/Cofins.
- 2029 to 2032 — gradual transition of ICMS and ISS to the IBS.
- 2033 — full system; PIS, Cofins, IPI, ICMS and ISS extinguished.
The message is simple: there is a short window to put the house in order before the impact truly hits your cash.
How to be ready
- Reconcile invoices, receipts and statements all year long, not only at closing.
- Know, at any moment, how much is tax and how much is your revenue.
- Track IBS/CBS credits so you don’t overpay.
- Hand your accountant clean, versioned data, with no rework.
How Chrysus helps
Chrysus connects your financial sources in read-only mode and turns the theory of the reform into a number: it shows, in reais, how much of each inflow is tax and how much is revenue, and cross-checks invoices against payments so no IBS/CBS credit is left behind. Instead of waiting for closing to learn the reform’s effect, you track real cash throughout the month.