Executive summary

On 30 April 2026, Brazil published the long-awaited Regulations of the Tax on Goods and Services (IBS) and the Contribution on Goods and Services (CBS), following unanimous approval of the IBS regulation by the IBS Management Committee (Comitê Gestor do IBS).

The publication of these regulations represents a key milestone in the implementation of Brazil's indirect tax reform, as they provide detailed operational rules and practical guidance for the application of IBS and CBS, marking the transition from a legislative to an operational phase of the new tax system.

Although IBS and CBS are legally distinct taxes, they are designed as "mirror taxes," sharing a common conceptual and regulatory framework. This design choice reinforces the importance of a coordinated and holistic approach by taxpayers when assessing impacts and preparing for compliance. (For background, see EY Global Tax Alert, Brazil enacts indirect tax reform establishing new consumption taxes, dated 17 January 2025.)

Key aspects of the IBS and CBS regulations

Common regulatory framework

The IBS and CBS regulations reflect a shared normative structure, consistent with the core principles of the consumption tax reform. This alignment aims to ensure neutrality, reduce cascading taxation and promote simpler, more transparent tax collection mechanisms across federal, state and municipal levels.

Operational clarity and compliance obligations

With the regulations now published, taxpayers gain greater clarity on:

• The practical functioning of IBS and CBS
• Ancillary obligations and reporting requirements
• Audit and assessment procedures
• Operational integration between IBS and CBS

A detailed analysis of the regulatory provisions will be essential to assess sector-specific impacts, compliance burdens and potential changes to existing tax positions.

System readiness and enforcement timeline

The publication of the regulations is expected to drive:

• Accelerated preparation and testing of tax, enterprise resource planning and accounting systems
• Increased compliance efforts, particularly in relation to split-payment mechanisms and the issuance of fiscal documents containing new mandatory information
• Heightened focus on internal controls and data governance

Importantly, the regulations provide that penalties for noncompliance may begin to apply as from the fourth month following the publication date (i.e., August 2026), significantly shortening the adaptation timeline.

Conclusion and next steps

The publication of the IBS and CBS regulations formally initiates the operational phase of Brazil's indirect tax reform and triggers a compressed adjustment period for taxpayers. Once the transitional period expires, failure to comply with the new requirements may result in fines and penalties, increasing tax exposure and operational risk.

Taxpayers should promptly:

• Perform a detailed review of the IBS and CBS regulations.
• Assess impacts on pricing, supply chains and contractual arrangements.
• Adapt systems, processes and fiscal documentation.
• Implement governance and controls to mitigate compliance and enforcement risks.

Early and coordinated action will be critical to ensure readiness and minimize disruption under Brazil's new consumption tax regime.