CBS and IBS These will be two of the most important taxes in Brazil’s new tax system and are already raising strategic questions among thousands of business owners: Is it worth staying in the Simples Nacional program, or is it better to switch to another tax regime?
The answer depends on the characteristics of each company, as the Tax Reform has created new taxation options that can significantly alter the tax burden, competitiveness, and the use of tax credits.
In this article, you’ll learn how these options work, what factors to consider before making any decisions, and how the management accounting department can help your company choose the most advantageous path.
How will the Simples Nacional tax system work under the tax reform?
A Tax reform It retained the Simples Nacional system but introduced significant changes related to CBS (Goods and Services Tax) and the IBS (Goods and Services Tax).
In practice, Companies that opt for the Simples tax regime now have two options for paying these taxes:
- The first option is to continue exactly as we do now, collecting CBS and IBS under the single Simples Nacional tax bracket (DAS).
- The second option allows the company to collect CBS and IBS separately, outside the DAS, while keeping the other taxes within the simplified system.
The second option creates a hybrid taxation model, which could be beneficial for certain types of businesses, particularly those that conduct a large number of business-to-business transactions.
What does it mean to collect CBS and IBS outside the Simples system?
When a company opts for separate collection, it remains subject to the Simples Nacional system for all other taxes, but calculates CBS and IBS in accordance with the general rules of the Dual VAT.
This means
- Taxes are no longer paid within the DAS;
- They will now be calculated separately;
- Taxes are itemized on the invoice;
- Customers can take advantage of tax credits from these transactions;
- The company will also begin to claim tax credits on its purchases, in accordance with the law.
In practice, this creates a dynamic very similar to that found in traditional VAT systems.
The main objective was to prevent companies under the Simples Nacional tax regime from losing their competitive edge in transactions with legal entities.
- Under the traditional Simples model, taxes paid under the DAS do not generate full tax credits for the buyer.
In a VAT-based system, this could lead large companies to avoid purchase from suppliers who have opted for the Simples tax regime, since they would not be able to recover the taxes paid in full.
By allowing for the separate collection of CBS and IBS, the Tax reform It reduces this type of problem and preserves the competitiveness of small businesses operating in the B2B market.
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When is it worth collecting CBS and IBS outside of the Simples system?
There is no single answer, but some scenarios suggest a greater potential for advantage.
- Companies that sell primarily to other companies
When customers are businesses that claim tax credits, the ability to itemize CBS and IBS on the invoice makes the supplier more competitive.
This is because the buyer can claim these amounts back on their own tax return. In many markets, this factor may directly influence the choice of supplier.
- Companies with a high volume of purchases
Companies that incur significant costs for goods, raw materials, supplies, and certain services may be able to recover a portion of the taxes paid on those purchases.
Depending on the cost structure, this recovery can significantly reduce the effective tax burden.
- Companies involved in supply chains
Businesses that are part of long industrial or commercial supply chains tend to be more heavily influenced by the credit system.
In such cases, separate collection can make the transaction more efficient from a tax perspective.
When might it be more advantageous to keep CBS and IBS within the DAS?
In many situations, continuing to pay the full amount under the Simples system will remain the best option.
This usually happens when:
- Most sales are to end consumers (B2C);
- The company has few usable tax credits;
- The administrative structure is lean;
- Revenue remains within the most favorable brackets of the Simples tax system;
- The operating costs of managing a hybrid model outweigh the benefits.
Businesses in the retail, food service, personal services, and various local sectors typically fit this profile, even though Each case must be analyzed individually.
Is it worth switching from the Simples Nacional tax system?
This is another question that has gained traction following the passage of the Tax reform. The answer remains: It depends.
Migrate to the Presumed Profit or to the Real Profit Just because there's a chance to use credits doesn't mean it's the right thing to do.
The decision must take several factors into account simultaneously, among which we can highlight the following:
- Annual revenue;
- Profit margin;
- Deductible expenses;
- Cost structure;
- Payroll;
- Customer profiles;
- Growth expectations;
- Industry.
In some cases, even with the new VAT, the Simples tax regime will still result in a lower tax burden. In others, the Presumed Profit regime may become more advantageous.
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The Importance of Tax Planning Before the Transition
A Tax reform It will be implemented gradually, but that does not mean companies should wait until it becomes mandatory to begin their studies.
The sooner the simulations are conducted, the greater the chances of adapting contracts, reviewing prices, adjusting systems, reorganizing processes, and preparing the team for the new scenario.
In addition, regulations will continue to evolve over the next few years. Keeping pace with these changes with the support of experts allows the company to capitalize on opportunities and mitigate risks throughout the transition.
Conclusion
The possibility of collecting CBS and IBS Exclusion from the Simples Nacional system is one of the most significant changes introduced by the Tax Reform for micro and small businesses.
However, this alternative does not mean that opting out of the DAS system or switching to another system will automatically be more advantageous.
The decision depends on a case-by-case analysis that takes into account:
- Customer profiles;
- The cost structure;
- The potential for offsetting credits;
- The impact on cash flow;
- Operational complexity;
- The business's strategic objectives.
In this scenario, sound tax planning combined with a advisory accounting it becomes essential.
Through comparative studies and financial projections, it is possible to identify the option that offers the greatest tax efficiency without compromising the company’s competitiveness and financial health.
Before choosing any course of action, it’s worth investing in a comprehensive technical analysis to assess the changes in the Tax reform an opportunity for sustainable growth.
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