Brazil plans to let businesses defer payment of the federal Goods and Services Tax (CBS) until the following month or pay based on estimated liabilities under a proposed bill. The measure aims to address concerns over tax credits and the split payment system ahead of the tax’s introduction in January 2027.
Brazil’s government will send Congress a bill that lets businesses postpone the final payment of the federal part of a new consumption tax. The tax takes effect in January 2027. Robinson Barreirinhas, the federal tax revenue chief, announced the plan at a press conference on 11 November 2026.
How the deferral would work
Under the proposal, taxpayers could choose to pay the federal Goods and Services Tax, known as CBS, in the month after the taxable transaction. They could also pay based on estimated liabilities. The bill would waive the rule that ties tax credits to actual payments.
The measure responds to concerns about how tax credits connect to payments. It also addresses the split payment mechanism, which sends consumption taxes straight to the government at the time of each sale instead of leaving companies to pay later.
Split payments and the election
Split payments will become optional in 2027, following political debate during Brazil’s 2026 presidential election. Supporters argue that the mechanism improves tax compliance and reduces evasion, while critics say it reduces companies’ working capital.
The reform timeline
Congress passed the consumption tax reform in 2023 after decades of debate. It replaces the federal PIS and Cofins levies with the CBS. It also merges the state ICMS and municipal ISS taxes into a new tax called the IBS.
The CBS takes effect in 2027 at close to its full rate, following a testing phase. The transition finishes in 2028. The IBS also starts in 2027 but phases in more slowly, reaching full implementation in 2033.
Several industry associations asked that 2027 serve only as a testing year, with full rollout postponed to 2028.
