Split payment is one of the most concrete changes the Brazilian Tax Reform brings to service businesses. Instead of receiving the full amount and remitting the tax later, the tax is now separated at the moment of payment: the portion that belongs to the tax authority is segregated at financial settlement, and only the net amount reaches your account. For the small and medium business, this changes how money enters your cash — and raises the cost of not keeping reconciliation up to date.
What split payment is
Set out in articles 31 to 36 of Complementary Law No. 214/2025, split payment is the mechanism by which the IBS (states and municipalities) and the CBS (federal) amounts are automatically segregated by financial institutions and payment service providers at the moment the transaction is settled, without passing through the supplier’s cash. In practice, the tax is sent directly to the IBS Management Committee (CGIBS) and the Federal Revenue Service, and the seller receives only the net value of the sale.
It is an important inversion: today the tax money passes through your account before being remitted — and that passage creates the illusion of cash that many businesses only discover at closing. With split payment, the separation happens at the source.
The modalities provided for
LC 214/2025 does not treat split payment as a single switch. There are different operating modes:
- Standard (or smart) split — with a real-time query, it withholds only the amount actually owed, already accounting for the taxpayer’s credits.
- Simplified split — applies fixed withholding percentages, aimed at operations where the buyer is not a regular taxpayer.
- Contingency split — an alternative for when real-time assessment is unavailable.
For the service provider, the practical difference is how much is withheld and when credits are recognized — which reinforces the need for clean, up-to-date tax data.
When this actually starts
2026 is a test year: the CBS is charged at a symbolic 0.9% rate and the IBS at 0.1%, with no effective collection, only to calibrate the system. From 2027, the CBS is charged at its full rate and PIS/Cofins is phased out. The IBS enters a gradual transition between 2029 and 2032, with the full extinction of ICMS and ISS expected by 2033. Split payment should be rolled out gradually over that period, as regulated by the CGIBS and the Federal Revenue Service.
Companies under the Simples Nacional regime have specific rules under discussion and should follow their accountant’s guidance — the regime is not immune to the changes, but its assessment method differs.
What changes in service-business cash
Three practical effects deserve attention:
- The net amount is smaller and more predictable. The amount that lands in your account already comes without the tax portion. Planning cash by the gross figure overestimates what is available.
- Confusing revenue with tax stops being an option. Without visibility into what is yours and what belongs to the tax authority, the business decides in the dark and finds the hole too late.
- Poorly assessed credit becomes idle money. IBS and CBS are non-cumulative: what you pay along the chain generates credit. Without reconciliation, part of that credit is lost for lack of record.
How to get ready
- Keep invoices, receipts and statements reconciled all year long, not only at closing.
- Know, at any moment, how much of each receipt is tax and how much is your revenue.
- Track your IBS/CBS credits so you neither overpay nor leave credit on the table.
- Hand your accountant versioned data with no manual rework.
How Chrysus helps
Chrysus connects bank, invoices and receipts in read-only mode and shows, in reais, how much of each inflow is tax and how much is your revenue — before split payment becomes mandatory. Automatic reconciliation cross-checks the three sources, exposes discrepancies and organizes your tax data the way your accountant needs it at closing. You reach the split-payment mandate with your cash under control, instead of discovering the impact on your bank statement.