As previously discussed, 2026 marks the beginning of the tax reform test phase, under which taxpayers are obliged to issue invoices stating CBS and IBS at a combined rate of 1% (0.9% for CBS and 0.1% for IBS) but are exempt from paying these taxes if the ancillary tax obligations are complied with.
Nevertheless, by the end of 2025, taxpayers had expressed major concerns about the operationalisation of the new taxes, as several highly relevant regulations are still to be enacted and doubts clarified.
Clear guidance and initial relief on tax compliance
Due to the uncertainties regarding tax compliance under the tax reform, on December 23 2025, the Federal Revenue Service (RFB) and the IBS Managing Committee (CGIBS) issued Joint Act 01/2025, to address the ancillary tax obligations necessary for IBS and CBS tax compliance in 2026.
This act provided a list of existing tax documents and invoices that will be incorporated into the CBS and IBS regulations, with the necessary adaptations for stating the new taxes, and listed the following tax documents to be created by the new taxes’ regulation:
Electronic Invoice for Water and Sanitation – NFAg;
Declaration of Specific Regimes – DeRE;
Electronic Invoice for the Sale of Real Estate – NF-e ABI; and
Electronic Invoice for Gas – NFGas.
Also, and probably most importantly, the act provided that, until the first day of the fourth month following the publication of the common part of the IBS and CBS regulations, no penalties will be applied for failure to register the IBS and CBS fields in tax documents, and the requirement for a waiver of the IBS and CBS collection will be considered fulfilled.
This comes as excellent news for taxpayers as it confirms the need for relevant regulation, and grants security in view of the uncertainties, waiving penalties and further implications until said regulations are enacted.
Supplementary Law 227/2026
As previously discussed, parallel to Supplementary Law 214/2025, Supplementary Bill of Law 108/2024 was under discussion, aiming to establish CGIBS and provide for IBS administrative litigation proceedings, tax penalties, and rules related to the distribution of the IBS collection proceeds to the federal entities, among other related matters.
On January 14 2026, Supplementary Law 227/2026 was published, as a result of the approval of Bill of Law 108/2024.
With this, CGIBS has been formally created, with legal competence to, among other matters:
Edit a single regulation and standardise the interpretation and application of IBS;
Collect IBS, make the offsetting, carry out the withholdings provided for in the specific legislation and distribute the proceeds of the collection to the states, the Federal District, and the municipalities;
Decide on administrative disputes;
Work together with the federal executive branch, with a view to harmonising rules, interpretations, ancillary obligations, and procedures relating to the common rules applicable to IBS and CBS; and
Coordinate – with a view to integration between the federative entities, within the scope of their competences – the activities of auditing, assessing, collection, and administrative representation relating to IBS, as well as its judicial and extrajudicial debt collection.
Supplementary Law 227/2026 also set forth the much-awaited rules regarding the use of the state VAT (ICMS) credits balance remaining by the end of 2032, when such tax is abolished. These rules regulate the approval of the credit balance by the states, and its use for offsetting ICMS tax debts and IBS levied on future transactions, transfers to third parties, and its cash reimbursement.
Final comments
The RFB/CGIBS Joint Act 01/2025 provided some welcome relief for taxpayers during the uncertainties of the beginning of the implementation of the tax reform, while Supplementary Law 227/2026 enables the enactment of regulations.
It is now highly anticipated that the relevant CBS and IBS regulations be issued, shedding light on the operationalisation of the new taxes and allowing taxpayers to properly organise their activities and systems.
