CBS and IBS: what changes? This is one of the most important questions for entrepreneurs, CFOs, controllers and tax managers who need to prepare their companies for the biggest transformation of the Brazilian tax system in recent decades.
The Tax Reform begins to enter a new phase from 2026, with the start of the transition to the new taxes on consumption: the Contribution on Goods and Services (CBS) and Goods and Services Tax (IBS).
These two taxes will replace several current taxes, changing the way tax credits are used, how operations are taxed and how companies will have to organize their tax, accounting and financial processes.
For medium-sized and large companies, especially those falling under the Real Profit or Presumed Profit, Understanding the changes now is essential to avoid negative impacts on cash flow, operating margin and competitiveness.
In this article, you'll understand the difference between CBS and IBS, the expected rates, the implementation schedule and the main impacts for companies.
What are CBS and IBS?
CBS and IBS are the new taxes created by the Tax reform to replace the current system of taxation on consumption.
Although they work together, they have different skills.
The CBS will be administered by the Federal Government and will follow the broad non-cumulative model, allowing companies to take advantage of credits on practically all expenses related to economic activity.
What is IBS?
O Goods and Services Tax (IBS) will be shared between states and municipalities.
He will take over:
- ICMS;
- ISS.
The IBS will have single national legislation, significantly reducing the current complexity caused by different state and municipal rules.
This standardization is considered one of the greatest advances of the Tax Reform.
Difference between CBS and IBS
One of the most common doubts about difference CBS IBS is related to the competence to collect.
While the CBS belongs to the federal sphere, the IBS will go to the states and municipalities.
In practice, both will work in a similar way:
- Taxation at destination;
- Broad non-cumulativeness;
- Use of financial credits;
- Uniform calculation basis;
- Harmonized legislation.
The main difference is only in the entity responsible for collection.
For taxpayers, the trend is for the operation to become increasingly integrated, simplifying tax collection and management.
Which taxes will be replaced?
A Tax reform gradually eliminates five taxes that today generate enormous complexity for companies.
CBS will replace
- PIS;
- COFINS.
IBS will replace
- ICMS;
- ISS.
Selective Tax
In addition to the CBS and the IBS, the Selective Tax (IS), This will apply to products considered harmful to health or the environment.
Among the sectors potentially impacted are:
- Alcoholic drinks;
- Cigarettes;
- Products with a high carbon footprint;
- Other items defined by legislation.
The purpose of the Selective Tax is not to raise revenue, but to regulate.
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What will the CBS and IBS rates be?
One of the most frequently asked questions about IBS CBS and its rates involves the actual percentage that will be paid by the companies.
The reference rates currently published are:
- CBS: approximately 9.3%;
- IBS: approximately 18.7%;
- Estimated total: 28%.
Although these percentages may be adjusted over the course of implementation, they serve as a basis for impact studies and tax planning.
It is important to note that simply comparing current and future tax rates can lead to erroneous conclusions. The new system significantly expands the use of tax credits.
As a result, many companies may see a reduction in the effective charge, even in the face of an apparently higher nominal rate.
How do financial loans work at CBS and IBS?
One of the most important changes in the Tax Reform is the financial credit model.
Today, many companies face difficulties in take advantage of PIS, COFINS, ICMS and ISS credits due to the various existing restrictions. With CBS and IBS, the logic changes completely.
The principle becomes: “Every tax paid in the chain generates a credit.”
This means that expenses such as:
- Electricity;
- Contracted services;
- Inputs;
- Goods;
- Equipment;
- Technology;
- Logistics;
They will be able to generate tax credits to a much greater extent. In practice, this reduces the cascading effect of taxation and increases the economic neutrality of the system.
For CFOs, this change will require in-depth reviews of supplier management, contracts and cost structures.
Rodrigo Ribeiro
Taxation at destination: what changes?
Another central concept of Tax reform is taxation at destination. Today, several taxes are collected at origin, favoring certain states and generating tax disputes.
With CBS and IBS, the tax goes to the place where consumption takes place.
This means
- Companies will sell to the whole country following more uniform rules;
- The fiscal war tends to diminish;
- Regional incentives will be gradually reduced;
- The revenue will go to the consumer state or municipality.
For companies operating nationally, the change represents operational simplification and greater tax predictability.
Tax reform transition schedule (2026 to 2033)
Implementation will not happen immediately. A long transition period has been created precisely to allow companies to adapt gradually.
2026 - Start of testing phase
- CBS and IBS are starting to appear in operations with reduced rates for adaptation purposes.
2027 - Extinction of PIS and COFINS
- The CBS now plays a predominant role in federal revenue.
2029 to 2032 - Gradual reduction of ICMS and ISS
- IBS's participation is gradually increasing.
2033 - Completion of the transition
- CBS and IBS are now the main taxes on consumption in Brazil.
From that moment on, the old model ceases to exist.
How will the Real Profit be affected?
Companies included in the Real Profit will probably be the ones to feel the effects of the Tax Reform first.
This is because they usually have:
- Complex supply chains;
- Large volume of credits;
- Interstate operations;
- Sophisticated tax structures.
Among the main impacts are:
Extended use of credits: The trend is to increase tax recovery along the chain.
Review of suppliers: Less tax-efficient suppliers can lead to a loss of competitiveness.
Need for technological adaptation: ERPs and tax systems will need to be updated to operate simultaneously with the old and new models during the transition.
Cash flow planning: The change in the credit mechanism will require new financial projections.
How will Presumed Profit be affected?
Companies in the Presumed Profit will also face important changes. Many businesses that today don't take advantage of relevant credits may now have significant tax advantages.
On the other hand, some sectors may face an increase in the effective charge depending on their cost structure.
The main points of attention include:
- Reassessment of the tax framework;
- Comparison between Presumed Profit and Real Profit;
- Simulation of the new tax burden;
- Reviewing the pricing of products and services.
In many cases, companies that have traditionally remained on Presumed Profit may find that Real Profit becomes more advantageous after the consolidation of the Reform.
What should companies do now?
Although the complete transition will only end in 2033, strategic decisions need to begin immediately.
The most prepared CFOs are already conducting internal projects to measure financial and operational impacts.
Some priority actions include:
Carrying out tax diagnostics: Map the current load and compare it with future scenarios.
Reviewing tax processes: Identify bottlenecks that may hinder the use of credits.
Evaluating systems and ERPs: Ensure that the technology is prepared for the period of coexistence between the two models.
Simulate scenarios: Project impacts on:
- Operating margin;
- Cash flow;
- Price formation;
Review the corporate and operational structure: The Reform could significantly alter the tax efficiency of certain operations.
Companies that anticipate this will have a greater capacity to adapt and a lower risk of losing competitiveness.
Conclusion
Understanding CBS and IBS what changes is no longer just a technical issue, but a strategic necessity for companies of all sizes.
The creation of the CBS and the IBS represents a profound transformation in consumption taxation, replacing complex taxes with a model based on broad financial credit, taxation at destination and greater national uniformity.
Although the transition will take place by 2033, the impacts will start as early as 2026, making it essential for CFOs, controllers and tax managers to start their analyses and simulations now.
Companies that prepare in advance will be better able to reduce risks, take advantage of opportunities and preserve their competitiveness during the implementation of the Tax reform.
Contact CLM Controller Accounting
Tax reform requires much more than following the news. It requires planning, simulations and strategic decisions based on numbers.
The CLM Controller Accounting has experts in corporate taxation and tax reform to help your company understand the impacts of CBS and IBS, identify risks and build a safe transition plan.
Click on the WhatsApp button, talk to our tax planning team and request a personalized simulation of the impacts of the Tax Reform on your company.
