More than 20 tax organizations in Brazil are calling for the effective implementation of the CBS, a new tax created under the country’s tax reform, to be postponed until 2028. In an open letter, they propose reserving 2027 for testing and adjustments, arguing that businesses are not yet equipped to make the transition safely.
The groups cite four main concerns: the CBS rate has not been finalized, the assisted tax-assessment system is not fully operational, companies need more time to adapt their internal systems, and there is no adequate process for resolving court disputes involving the new taxes.
The letter says that if the Senate sets the CBS rate by December 15, businesses could have only a little more than two weeks to assess its impact, renegotiate contracts, review prices and adjust operations before the new period begins on January 1. The organizations consider that window too short, given the different circumstances across economic sectors and the potential effects on companies’ effective tax burdens.
The assisted assessment system is intended to help calculate CBS and IBS, Brazil’s Tax on Goods and Services, using information about taxpayers’ transactions. The organizations say that without a fully functioning system, companies cannot adequately test and adapt their procedures in advance. They also point to the work required to update business management software, invoicing, tax settings and credit and debit controls, saying delays in public-sector rules and tools have reduced the time available.
The letter also warns of possible legal conflicts. Although the gradual increase in IBS rates is scheduled to begin in 2029, the tax is due to apply at a rate of 0.1% in 2027. Because IBS and CBS may involve overlapping issues while falling under different judicial jurisdictions, the groups say courts could reach conflicting decisions about the same transaction.
Gustavo Brigagão, national president of the Center for the Study of Law Firms (CESA), said the number of specialist tax-law organizations backing the initiative reflects the seriousness of their concerns. He said the call was not opposition to the reform, but a request to implement it responsibly and with legal certainty. In his view, 2026 did not fulfill its intended role as a testing year, particularly because of delays by public authorities, making 2027 necessary for meaningful testing and corrections.
The signatories say a postponement should be accompanied by the legal changes needed to give businesses time to review contracts and prices, ensure the assessment systems are fully operational, adapt corporate structures and create mechanisms to coordinate disputes involving IBS and CBS. They say they support the reform’s aims of simplification, transparency and neutrality, but argue that without the necessary technical and legal conditions, the transition could bring legal uncertainty, higher costs and negative effects on economic activity.
Sources: Folha Mercado.