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Brazil's Split Payment and Tax Reform (CBS/IBS): What It Means for Online Sellers
Brazil is in the middle of the biggest change to its consumption taxes in decades. Five taxes are being replaced by a dual value-added tax, and the way those taxes are collected is changing too. At the center of this change is the Brazil split payment: a mechanism in which the tax on a sale is separated at the moment of payment and sent directly to the government, before the money reaches the seller. For creators, infoproducers and online businesses, this affects pricing, cash flow, reconciliation and the way payment providers settle your sales.
This explainer covers what the Brazil split payment is, the Brazil tax reform CBS IBS 2027 timeline, how split payment on Pix in Brazil and on cards is expected to work, what the Brazil tax reform means for digital products, and how to prepare.
Important: this article is for general information only and is not tax or legal advice. Rules are still being detailed by joint acts of the tax authorities. Talk to a Brazilian accountant before making decisions.
Not to be confused with revenue split. In this article, "split payment" means the tax mechanism of the reform. If you are looking for splitting revenue between co-producers and affiliates, see our guide to payment split for co-producers.
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Brazil's tax reform in brief
The reform was approved by Constitutional Amendment 132/2023 and regulated by Complementary Law 214/2025. It replaces five consumption taxes with three new ones:
Old taxes (being phased out)
New taxes
PIS and Cofins (federal)
CBS (Contribuição sobre Bens e Serviços), federal
ICMS (state) and ISS (municipal)
IBS (Imposto sobre Bens e Serviços), shared by states and municipalities
IPI (federal, mostly reduced to zero)
IS (Imposto Seletivo), on goods harmful to health or the environment
CBS and IBS together form a dual VAT. They are charged on a broad base of goods and services, including digital services, with a non-cumulative credit system: businesses can generally credit the tax paid on their purchases against the tax due on their sales.
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Brazil tax reform CBS IBS 2027: the transition timeline
The reform is gradual. Here is the Brazil tax reform CBS IBS 2027 timeline as set out in the legislation:
Year
What happens
2026
Test year. CBS at 0.9% and IBS at 0.1% are shown on invoices, with offsetting rules so that most taxpayers do not pay extra. Split payment integration tests started on 15 October 2026.
2027
CBS is charged in full and PIS/Cofins are extinguished. The Selective Tax (IS) starts. IPI is reduced to zero for most products.
2028
IBS continues at a test rate.
2029 to 2032
IBS is phased in gradually while ICMS and ISS are phased out.
2033
Full system in force. ICMS and ISS are extinguished; CBS and IBS fully replace the old consumption taxes.
The final rates will be set by Senate resolution and by the authorities' acts. Market studies often cite a combined CBS plus IBS reference rate of around 26.5% to 28%, but this is not final, and reduced rates apply to some sectors.
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What is the Brazil split payment?
Under the current system, a seller receives the full amount of a sale and later pays the tax through periodic returns. Under the Brazil split payment, created by articles 31 to 36 of Complementary Law 214/2025 and detailed in Decree 12,955/2026, the payment provider separates the CBS and IBS from the payment at the time of settlement and sends that portion directly to the tax authorities. The seller receives the net amount.
In practice, with the Brazil split payment, for a sale of R$ 1,000 with taxes of, for example, R$ 265 (using an illustrative rate), the payment provider would settle R$ 735 to the seller (before its own fees) and route R$ 265 to the government, with adjustments for credits.
The goals of the Brazil split payment are to reduce tax evasion, speed up collection and make credits more reliable for businesses.
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Two procedures: standard ("smart") and simplified
The legislation provides two procedures for the Brazil split payment:
Standard procedure (also called "smart split"). The payment provider queries the tax systems and withholds only the amount that is still open after considering credits and payments already made. When the real-time query is unavailable, the provider withholds the full amount and any excess is refunded within a short period.
Simplified procedure. A fixed percentage, set by joint act, is applied to the payment, with an adjustment at the end of the period. Under the decree, charges issued without CBS and IBS information are treated as electing this procedure.
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How split payment on Pix in Brazil and on cards will work
Decree 12,955/2026 establishes that the Brazil split payment will be implemented in at least two stages, with dates set by joint act of the Federal Revenue Service (RFB) and the IBS Management Committee (CGIBS):
Stage 1 (optional, B2B): applies to regular-regime taxpayers in business-to-business payments made by boleto, Pix (several modalities), TED or TEF. This is where split payment on Pix in Brazil starts.
Stage 2 (mandatory): extends the split to credit, debit and prepaid cards and vouchers, and to business-to-consumer (B2C) operations, with the simplified procedure available for all arrangements.
Outside the split: cash and checks.
As of October 2026, controlled integration tests have begun, with no real transactions or penalties. The date for production use depends on the joint act, and market sources expect the first optional phase no earlier than 2027.
For sellers of digital products, who sell mostly to consumers (B2C) through Pix and cards, the mandatory stage of the Brazil split payment is the one that matters most. Its date has not been fixed yet.
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Brazil tax reform and digital products: what changes
The Brazil tax reform for digital products brings several important changes:
A single tax base for digital goods and services. Under the old system, there were long disputes over whether software, streaming and digital content were subject to ICMS (goods) or ISS (services). CBS and IBS apply to goods and services alike, which should reduce that uncertainty.
Taxation at destination. IBS is charged based on the location of the buyer, not the seller. For online sellers with buyers across Brazil, this changes how tax is allocated between states and municipalities.
Credits. Businesses in the regular regime can take credits on business inputs, such as software, advertising and platform fees, which can reduce the net tax burden for some sellers.
Simples Nacional options. Companies in the Simples Nacional regime continue to pay through the unified DAS and, under current guidance, are not subject to the split in that regime. However, they can choose to pay CBS and IBS separately under the regular regime ("hybrid" option), in which case the split applies to that portion. This choice affects whether your business customers can take credits on your sales.
Imports of digital services. Foreign platforms and digital services sold to Brazilian buyers fall under the new taxes, with obligations that may involve payment providers and digital intermediaries.
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What the Brazil split payment means for your cash flow
The most visible effect for sellers will be on cash flow:
You will receive net amounts. Under the Brazil split payment, the tax portion leaves at settlement instead of staying in your account until the tax payment date. Businesses that used that float as working capital will feel the difference.
Pricing must reflect the tax. If your prices do not account for CBS and IBS correctly, your margins will shrink at settlement time.
Receivables anticipation does not avoid the split. According to the decree, anticipating receivables does not change the obligation to segregate the tax.
Refunds and returns need clear rules. The decree sets timelines for refunds of tax withheld in excess, so plan your cash accordingly.
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Reconciliation and reporting
With the Brazil split payment, your payment reports will become more complex. For each sale, you will need to reconcile the gross amount, the tax withheld through the split, the provider's fees and the net settlement. If your reports already do not match your acquirer statements, this is the moment to fix it. See our guide to payment reconciliation.
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How to prepare for the Brazil split payment
You do not need to change everything today, but these steps will make the transition smoother:
Talk to your accountant about your tax regime (Simples Nacional, presumed profit or real profit) and whether the hybrid option makes sense for you.
Review your prices and model the impact of CBS and IBS on your margin from 2027 onward.
Map your payment methods, separating Pix, card and other methods, and B2B from B2C sales.
Clean up your invoicing. Make sure invoices carry the correct information, since the split relies on it.
Check your payment provider's roadmap. Ask how and when they will support the split, how withheld taxes will appear in your reports and how refunds will be handled.
Plan cash flow for receiving net amounts once the mandatory stage begins.
Follow official updates from the Federal Revenue Service and the IBS Management Committee, because the joint acts will set the final dates and procedures.
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The role of your payment provider
In the Brazil split payment model, the payment provider is where the tax is separated. That makes your choice of checkout and payment platform more important than ever. A provider that integrates the split well will give you clear reports, accurate settlement and fewer reconciliation problems.
AtomicPay settles Pix sales on D0 and card sales on D14 (with D2 anticipation depending on volume), with one dashboard for every sale across Pix and card. As the authorities publish the joint acts that set the dates and technical rules for the split, AtomicPay will update its sellers and this guide. Learn more about the AtomicPay checkout.
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Conclusion
The Brazil split payment is a structural change: tax will be separated at the moment of payment, and sellers will receive net amounts. Combined with the Brazil tax reform CBS IBS 2027 timeline, it means online sellers should start planning now: understand their tax regime, review prices, clean up invoicing and choose a payment partner ready for the new rules. The details are still being defined, so treat this guide as a starting point, follow official updates and work with a qualified tax professional.
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Will the Brazil split payment apply to every Pix I receive?
Not immediately. The first stage is optional and covers business-to-business payments, including Pix, made by regular-regime taxpayers. Pix payments from consumers enter the split in the mandatory stage, whose date will be set by joint act. Simple transfers between individuals are not taxable sales and are not the target of the split.
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Does the split payment change the price my buyer pays?
The split itself does not change the price; it changes how the tax inside the price is collected. However, the transition from the old taxes to CBS and IBS can change your tax burden, which may lead you to adjust prices. Model the impact with your accountant.
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My business is in Simples Nacional. Do I need to worry about the split?
Under current guidance, companies that remain fully in the Simples Nacional unified regime pay through the DAS and are not subject to the split in that regime. If you opt to pay CBS and IBS separately under the regular regime, the split applies to that portion. Confirm your situation with an accountant.
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When will split payment become mandatory for card payments?
Card payments and B2C operations are part of the mandatory stage defined in Decree 12,955/2026, but the start date depends on a joint act of the Federal Revenue Service and the IBS Management Committee. As of October 2026, only controlled integration tests have started.
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Will I still receive my money on D0 with Pix after the split?
Settlement timing is defined by your payment provider's terms, and the split does not by itself change when the provider pays you. What changes is the amount: the tax portion will be routed to the authorities at settlement, so you will receive the net value. Check your provider's terms as the rules are finalized.
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