São Paulo court excludes IBS and CBS from ICMS calculation base during the transition period
The 16th Public Treasury Court of São Paulo granted a preliminary injunction securing a taxpayer’s right to calculate and pay ICMS without including the IBS and the CBS in its calculation base during the tax reform transition period.
Through Responses to Tax Ruling Requests, the State of São Paulo has taken the position that, as from January 1, 2027, the amounts corresponding to the IBS and the CBS must be included in the ICMS calculation base on the grounds that they form part of the transaction value. In reviewing the case, however, the court held that this interpretation improperly broadens the calculation base of the state tax.
The court noted that, unlike the Selective Tax, whose inclusion in the ICMS calculation base is expressly provided for by law beginning in 2027, there is no express provision authorizing IBS and CBS to be incorporated into the calculation of ICMS. According to the decision, the absence of a specific statutory provision precludes the interpretation advanced by the São Paulo tax authorities.
The decision also considered that the IBS and the CBS are calculated on a tax-exclusive basis and that the corresponding amounts do not constitute definitive business revenue of the taxpayer.
This is a first-instance preliminary injunction issued in a specific case and remains subject to judicial review. The merits of the dispute therefore remain pending final adjudication.
Simples Nacional: Regular regime election deadline
Taxpayers opting for Simples Nacional will have until October 30, 2026 to elect to calculate and pay the IBS and the CBS under the regular regime.
As a general rule, taxpayers opting for Simples Nacional are subject to the rules applicable to that regime, so the new taxes will be levied at reduced rates determined in accordance with the Simples Nacional rules.
A taxpayer may, however, elect to calculate and pay IBS and CBS under the regular regime, in which case the full rates of the new taxes will apply. In addition, on September 1, 2026, the Executive Secretariat of the Simples Nacional Steering Committee published a manual with instructions for the regular IBS and CBS regime. The election will be available in September and March of each year.
Specific Regimes for cooperative societies
As a general rule, cooperative societies may elect a specific IBS and CBS regime that provides for zero rates on certain transactions between the cooperative and its members. The benefit applies both to supplies of goods and services by a member to the cooperative to which it belongs and to transactions in which the cooperative supplies goods or services to members subject to the regular IBS and CBS assessment regime.
To provide guidance on election of the specific regime, the Federal Revenue Service and the IBS Steering Committee issued joint guidance and a manual on September 18, 2026 setting out the applicable procedures. To take effect in 2027, the election must be made by October 31, 2026 and is also conditioned on submission of a list of the cooperative’s members, including their identification information and respective admission dates, which is required to complete the election.
The application must be filed through the Federal Revenue Service’s Services Portal.
Compensation Mechanisms for Tax Incentives Extinction
On September 9, 2026, the Federal Revenue Service published an Ordinance updating the qualification rules for financial compensation available to holders of ICMS tax incentives granted subject to obligations (benefícios onerosos), in connection with the reduction of those incentives as ICMS is gradually replaced by the IBS. The measure amends RFB Ordinance No. 635/2025, which regulates qualification for the compensation set forth in Article 12 of Constitutional Amendment No. 132/2023. The changes include:
- Conditions for eligibility for the benefit: for qualification purposes, the conditions or obligations imposed on the beneficiary may be set forth in the grant instrument, the rule establishing the tax or financial-tax incentive or benefit, or a related rule, subject to the requirements applicable to benefits granted for a fixed term and subject to conditions.
- Consultation with the federative entity that granted the incentive: during its review of programs or instruments relating to the benefits, the General Coordination of Taxation of the Federal Revenue Service may request clarifications from the federative entity that established them, including by sharing the preliminary result of its analysis. The federative entity will have up to 30 days to submit factual information relevant to the review.
The new Ordinance entered into force on the date of its publication.
São Paulo NFS-e gains new file layout with IBS and CBS information
The Municipal Finance Secretariat of São Paulo updated the XSD file to include information relating to IBS and CBS and also updated the WebService Manual, which provides guidance to companies that integrate their own systems with the municipal invoice issuance system.
The changes follow SE/CGNFS-e Technical Notes Nos. 003 of July 4, 2025 and 004 of August 19, 2025, issued by the Federal Government. The documents establish how the new NFS-e layout must accommodate IBS and CBS.
The updated XSD files and the new version of the WebService Manual are already available to taxpayers for consultation and download on the Nota Fiscal Paulistana Portal.
NF-e: CFOP titles and descriptions
In September 2026, the Federal Revenue Service and the National Meeting of State Tax Coordinators and Administrators (Encat) updated the CFOP Table used by the NF-e Authorization Services.
The new version includes the columns “Title” and “Description”, reproducing the name and explanatory note for each CFOP set forth in Annex II to SINIEF Agreement without number of December 15, 1970. The new information is solely informational and is intended to assist developers and issuers of electronic tax documents in interpreting the table.
The update does not change the other columns or previously published indicators, does not create, restrict, or expand circumstances in which the codes may be used, and does not result in rejection by the Authorization Services.
Version 2.10 leaves unchanged the information relating to the code, effective start and end dates, and CFOP usage indicators.
The column identifying whether a code may be used by a taxpayer subject exclusively to IBS and CBS, named “indExcIBSCBS”, had already been included in version 2.00, published in August 2026.
The Technical Bulletin further states that the list of CFOP codes, their names, and corresponding explanatory notes is established by the SINIEF Agreement without number and its annexes, as amended by SINIEF Adjustments. In the event of a discrepancy between the table and the text of the Agreement, the Agreement will prevail and should be consulted on Confaz’s official website.
This publication is intended for informational purposes only and does not constitute legal advice. Our Indirect Tax team remains available to provide specific legal guidance tailored to your business needs.
