Brazil Tax Reform for Goods and Services

Brazil’s long-awaited tax reform is progressing from legislative approval to practical implementation with final regulatory text passed by the Chamber of Deputies on December 16, 2025. This text regulates the management, collection, and oversight of the new Tax on Goods and Services (Contribuição sobre Bens e Serviços - CBS), completing the second major stage of reform and sending the bill to the President for sanction. 

The regulatory bill creates a national committee to coordinate tax methodology, distribution, and enforcement between federal, state, and municipal authorities, and it clarifies transitional rules and industry-specific treatments, including treatment for financial services, digital marketplaces, beverages, and incentivized sectors. 

As a result of these legislative approvals, Brazil is positioning for a phased rollout beginning 2026, with a test period for the new consumption taxes and gradual replacement of legacy levies like ICMS (Imposto sobre Circulação de Mercadoria e Serviços) and ISS (Imposto Sobre Serviços) through 2033. 

For U.S. companies, the regulatory clarity provided by the December legislative actions strengthens the predictability of the new tax framework and gives firms more time to adapt systems and pricing ahead of 2026.

The unified tax system IBS (Imposto sobre Bens e Serviços) / CBS (Contribuição sobre Bens e Serviços) may simplify cross-state operations in Brazil, reduce cascading tax burdens, and potentially improve competitiveness for U.S. exporters, especially for goods and services that benefit from streamlined VAT-style (Value Added Tax) compliance. However, businesses in sectors like financial services and digital platforms should plan for specific compliance obligations and transitional impacts as the new regime becomes operative.

For additional information on Brazil’s opportunities for U.S. exporters, please contact Diogo Pinto diogo.pinto@trade.gov , Commercial Specialist, U.S. Commercial Service, São Paulo.  

To explore additional industry sector intelligence and insights on the Brazilian market, please see Brazil Published Market Intelligence.