Tax reform: advances and adjustments to keep on the radar in March

IBS Steering Committee keeps chair in office and appoints vice-chairs for a one-year term

At a meeting held on March 10, 2026, the IBS Steering Committee decided to keep Flávio César de Oliveira as chair of the body for another year, on a provisional basis. Flávio Oliveira chairs the National Committee of State Finance Secretaries (Comsefaz) and serves as Finance Secretary of the State of Mato Grosso do Sul.

On the same occasion, the vice-chairs of the Steering Committee were elected for a one-year term. The first vice-chairmanship will be held by Luiz Felipe Vidal Arellano, Municipal Finance Secretary of São Paulo, and the second vice-chairmanship by Luiz Claudio Gomes, Finance Secretary of Minas Gerais.

The IBS Steering Committee is responsible for administration of the tax, including activities such as collection, inspection, revenue distribution, and definition of operational rules. Its main body is the Superior Council, composed of 54 members, of whom 27 represent the states and 27 represent the municipalities.

Bill proposes limits and rules for Selective Tax rates

In March, a Complementary Bill was introduced before the Chamber of Deputies proposing amendments to Complementary Law No. 214/2025 to establish limits and criteria for setting Selective Tax rates.

The bill establishes a minimum rate of 0% and a maximum rate of 5% for the tax, and expressly prohibits its use for predominantly revenue-raising purposes. Under the proposal, such purpose will be deemed to exist when: (i) the explanatory memorandum indicates a permanent increase in revenue; (ii) there are no technical studies demonstrating the regulatory adequacy and proportionality of the measure; or (iii) the revenue-raising effects materially and persistently exceed the intended regulatory effects.

The text also makes the definition or amendment of rates conditional upon enactment of a specific ordinary law, necessarily preceded by a Regulatory Impact Assessment. This assessment must examine, among other points, the regulatory problem, the proportionality of the rate, the economic and competitive impacts, and the consistency between the revenue effects and the regulatory purpose, in addition to considering less restrictive instruments, such as information campaigns, labeling, technical standards, inspection, and incentives for less harmful alternatives.

In addition, the bill provides for periodic reassessment of the rates every four years by the Executive Branch, followed by submission to the National Congress. In the absence of such reassessment, the rate in force would be automatically reduced to the minimum threshold. The text also prohibits the establishment of differentiated rates among functionally equivalent goods or services, unless there is express technical justification in the Regulatory Impact Assessment.

Constitutional amendment proposal seeks to bring forward the effectiveness of IBS to 2027

In March, a Proposed Constitutional Amendment (PEC) was introduced before the Chamber of Deputies seeking to bring forward the implementation of the new consumption taxation model, with IBS becoming effective as from January 1, 2027. The proposal amends constitutional provisions to replace ICMS and ISS as from that date.

According to the text, bringing forward the effectiveness of IBS is intended to accelerate the tax transition for both taxpayers and tax administrations. The proposal also includes provisions in the Transitional Constitutional Provisions Act to govern state tax incentives linked to ICMS.

In addition, the PEC provides for the creation, by complementary law, of a fund intended to manage credits arising from such tax incentives. The so-called Receivables Fund of the States and the Federal District will have an accounting and financial nature and will not be deemed a public expenditure, subsidy, or federal credit transaction, while also ensuring the preservation of credits accumulated by companies before the states, including those related to exports.

Encat publishes technical notes and begins preparations for implementation of split payment

On March 2, 2026, the Technical Coordination of the National Meeting of State Tax Coordinators and Administrators (Encat) published technical notes providing guidance on the inclusion of information related to the split payment mechanism in several models of electronic tax documents. The measures are preparatory in nature, considering that adoption of the system is scheduled for 2027.

According to the published material, the new fields are intended to allow tax administrations, issuers, and other participants in the electronic tax document ecosystem to begin, in advance, the planning, development, and testing required for the necessary operational adjustments.

The Technical Notes detail the form of linkage between the electronic tax document and the financial transaction subject to split payment, whether through the direct insertion of data in the document itself or through a specific event. The text emphasizes that this linkage represents only an expectation of payment, which may or may not materialize, as is the case with payment slips that are issued and later remain unpaid.

Both the Technical Notes and the Technical Information Report clarify that, although the fields have been incorporated into the layouts, there will be no requirement to fill them in or use them in the production environment during 2026. The dates on which they will become mandatory are to be defined later in joint normative acts to be issued by the Steering Committee and the Federal Revenue Service.

Curitiba issues guidance on issuance of the National NFS-e by taxpayers under a special regime

On March 5, 2026, the Municipality of Curitiba published an ordinance establishing guidance on the issuance of the National Electronic Services Invoice (NFS-e) by taxpayers rendering certain services, such as health plans, hospitals, intermediation services, among others, and that are subject to a special NFS-e issuance regime due to the specific nature of their activities.

The ordinance states that the new NFS-e layout is already available in the National NFS-e issuance environment, as provided for in Technical Note No. 04, dated August 19, 2025, issued by the Executive Secretariat of the NFS-e Steering Committee. The Technical Note establishes the adjustments to the tax document layout required by the new IBS and CBS rules.

According to the normative act, taxpayers using their own systems or third-party systems integrated with the National Issuer API must mandatorily use the new information group provided for in the technical note as from March 5, 2026. Those using the Web Issuer, still without API integration, must record amounts related to third-party transactions, reimbursements, and refunds in the deduction or reduction field.

Senate Economic Affairs Committee approves update to the Tax-on-the-Receipt Law to reflect the tax reform

On March 24, 2026, the Economic Affairs Committee (CAE) of the Federal Senate approved a Bill updating the so-called Tax-on-the-Receipt Law to reflect the consumption tax reform.

The proposal amends the Tax Transparency Law and the Consumer Protection Code (CDC) to ensure the continuity of consumer information regarding taxes embedded in the prices of goods and services during the transition period to the new system. The text updates the list of taxes to be disclosed, now including IBS, CBS, and the Selective Tax, with an express definition of the transition phases, final deadlines, and starting dates of incidence.

The bill also standardizes the method for calculating the tax burden per good or service, authorizes the use of digital tables and reasoned estimates when exact calculation is not possible, and governs the treatment applicable to supply chains, including under specific or differentiated regimes. In addition, it modernizes the mechanisms for disclosure of information, prioritizing electronic means and digital documents, with specific rules for situations involving IPI and financial services.

The proposal also provides differentiated treatment for small businesses. Compliance with the law will be optional for Individual Microentrepreneurs (MEI) and nano-entrepreneurs, while microenterprises and small-sized companies subject to Simples Nacional may disclose only the rate applicable under that regime, plus the estimate of non-recoverable taxes levied in prior stages of the chain.

The text will now move to the Senate Committee on Transparency, Governance, Oversight and Control, and Consumer Protection (CTFC) for discussion.

National Congress advances proposals to amend the tax reform legislation

On March 25, 2026, three legislative initiatives with potential impact on the new consumption taxation system advanced in the National Congress, involving the easing of rules for granting tax incentives, the creation of an incentive for the acquisition of motorcycles by transport and delivery professionals, and the creation of a deemed CBS credit for fuels destined for the North Region.

On one front, the Chamber of Deputies approved a Complementary Bill proposed by the Federal Senate that eases, for fiscal year 2026, fiscal and budgetary conditions applicable to the granting of certain tax benefits and the execution of mandatory expenditures. The text allows progress on incentives aimed, among other matters, at the free trade areas provided for in the consumption tax reform legislation, provided that the revenue waiver is included in the budget law or accompanied by a compensatory measure. The proposal also reaches situations involving PIS and Cofins credits on certain inputs and relief from such contributions on the commercialization of residues, waste, and scraps. The approved text was sent for presidential sanction.

On another front, a bill was introduced before the Chamber of Deputies to reduce IBS and CBS rates to zero on the acquisition of motorcycles by motorcycle taxi drivers and professional motorcyclists linked to ride-hailing and delivery platforms. The measure covers brand-new, domestically manufactured motorcycles intended for the exercise of the professional activity, subject to compliance with requirements such as a minimum licensing period, regular registration status, and compliance with the safety requirements provided for in traffic legislation. The bill also limits enjoyment of the benefit to the acquisition of one vehicle every two years and provides for restrictions and penalties in cases of improper use.

Lastly, a Complementary Bill was also introduced proposing amendments to the tax reform legislation to create a deemed CBS credit on transactions involving gasoline and diesel fuel destined for consumption in the North Region, including the portions intended for mandatory blending with anhydrous ethanol and biodiesel. The proposal seeks to mitigate structural price distortions associated with the region’s logistical and supply challenges, with temporary effectiveness through December 31, 2033.

This material is for informational purposes only. Our Consumption Tax team is available to provide specific legal advice.