IBS Steering Committee — CGIBS.
Interfederative governance, single regulation, exclusive administrative litigation and revenue distribution.

Constitutional basis and reason for existing

EC 132/2023 art. 156-B — constitutional provision

Article 156-B of the Federal Constitution, added by EC 132/2023, established the IBS Steering Committee as a public entity of a nature shared among States, the Federal District and Municipalities to administer the new tax. The constitutional choice reflects a technical-political diagnosis: because the IBS replaces the ICMS (state) and the ISS (municipal), traditional jurisdiction would be scattered among thousands of entities — a situation that would compromise the uniformity required by a national dual VAT. The institutional solution was to assign the tax administration of the IBS to an interfederative body, while preserving the entities’ constitutional ownership of the revenue.

LC 227/2026 — operational institutionalization

Complementary Law 227/2026, enacted on January 13, 2026, gave substance to the constitutional provision. The statute formally created the CGIBS, defined its legal nature as a public entity of a technical and operational nature under a special regime, set its headquarters in Brasília (Federal District), established technical, administrative, budgetary and financial independence, and regulated the internal structure, the jurisdiction, the staffing regime and the funding. LC 227/2026 also took the opportunity to refine more than 120 points of LC 214/2025 — largely closing the legal-framework construction phase of the reform and opening the operational implementation stage.

Why a single interfederative entity rather than ad hoc cooperation

The alternative of ad hoc cooperation between state and municipal revenue services — the CONFAZ model for the ICMS, with agreements negotiated case by case — was discarded for two reasons: a historical slowness in reaching consensus and fragility in the face of diverging interests among the entities. The CGIBS is a more robust institutional design: deliberation by qualified majority with nationwide binding effect, a single regulation, unified litigation. The comparative inspiration comes from federative VAT models (Canada, with the GST/HST coordinated among provinces) and from national VATs with unified agencies (Spain, with the Agencia Tributaria acting in partnership with the Diputaciones Forales). Each architecture has its own trade-offs.

The CGIBS as a sui generis entity

The CGIBS is not a federal autarchy, not a regulatory agency, not a classic public consortium — it is a sui generis public entity, created by a constitutional rule and regulated by complementary law, with governance shared among distinct federative entities. The hybrid nature required a specific normative solution for several points: staffing regime (its own, not tied to a federal regime), external control (the Courts of Auditors of the federative entities), and asset and financial regime (budgetary independence). Constitutional case law on federative cooperation in tax matters — consolidated in decisions such as ADI 4,397 (Justice Ricardo Lewandowski, judged 11/28/2018, on interfederative cooperation in the ICMS) and in successive rulings on the normative role of CONFAZ — provides the interpretive backdrop. EC 132/2023 itself is the subject of ADI 7,633, filed in 2024 before the Federal Supreme Court (STF), which challenges aspects of the reform’s overall design; the ruling on this ADI is likely to shape constitutional case law on the CGIBS over the coming years.

Organizational structure of the CGIBS

Superior Council — the highest deliberative body

The Superior Council is the apex body of the CGIBS — the highest instance of political and normative deliberation. Its composition is bipartite and balanced: equal representatives of the States and the Federal District, appointed by the Governors, and representatives of the Municipalities, chosen by election among the Municipalities themselves. The specific proportions and the election method are detailed in LC 227/2026 and in the implementing infralegal acts. The state representatives are typically Secretaries of Finance; the municipal ones include Municipal Secretaries of Finance of capitals and large municipalities, elected in a process organized among the entities.

Presidency and Vice-Presidencies — federative rotation

The Presidency of the CGIBS rotates between representatives of the States and the Municipalities, in terms defined by the internal bylaws. The Vice-Presidencies complete the federative balance design. Rotation is a structural element of legitimacy — it prevents institutional capture by one of the spheres and forces the continued building of political consensus. The first composition was installed in 2026, with an initial presidency under the transition rules established by LC 227/2026 and by the internal bylaws approved by the Superior Council.

Executive Board and technical directorates

Below the Superior Council, the Executive Board runs the body’s day-to-day operation and is responsible for executing the political deliberations. The technical directorates cover the essential operational functions:

• Collection Directorate — management of charging, collection and offsets.
• Taxation Directorate — normative interpretation, rulings, issuance of opinions.
• Audit Directorate — coordination of tax actions integrated with the Federal Revenue Service and state and municipal revenue services.
• Information Technology Directorate — IT infrastructure, integrations with the Reform NF-e (NT 2025.002), collection systems and split payment.
• Litigation Directorate — conduct of the IBS administrative litigation.
• Attorney’s Office — legal representation of the CGIBS in court and litigation activity.
• Treasury — financial management and distribution of revenue among the entities.

Internal and external control bodies

The CGIBS has an Internal Affairs Office and an Internal Audit — internal control bodies responsible for investigating functional irregularities and for operational auditing. External control is exercised by the Courts of Auditors of the federative entities — a singular model that reflects the shared nature of the body: the Federal Court of Auditors (TCU) is not the exclusive controller (because the CGIBS is not a purely federal entity), and there is no single subnational Court of Auditors (because there are multiple entities involved). Case law on the control jurisdiction of state and municipal Courts of Auditors over an interfederative entity will have to be built over the coming years.

Initial technical committees

The first administration of the CGIBS, installed in 2026, set up technical committees to accelerate the body’s operational structuring: committees on the single regulation, on integration with the Federal Revenue Service (for the CBS), on technology, on split payment, on litigation and on specific regimes. The committees bring together technical representatives of the state and municipal revenue services and produce normative inputs for deliberation by the Superior Council. Monitoring the output of these committees is part of the preventive tax strategy of large taxpayers.

Normative powers — single regulation and regulatory power

Issuing the single IBS regulation

The most structural power of the CGIBS is the issuance of the single national IBS regulation. For the first time in Brazilian tax history, a tax that replaces the ICMS (with 27 distinct state regulations) and the ISS (with more than 5,500 municipal laws) has a single regulation applicable throughout the national territory. The regulation details the taxable events, the calculation basis, the crediting mechanisms, the ancillary obligations, the specific regimes and the operating rules. Its issuance falls exclusively to the CGIBS; issuance by an isolated federative entity is prohibited — a principle that preserves the uniformity essential to the dual VAT.

Harmonization of interpretations and rulings

It falls to the CGIBS to harmonize the interpretation of the IBS regulation, eliminating hermeneutic divergences among the federative entities. The issuance of normative opinions binding on the Federation as a whole preserves legal certainty. The CGIBS also responds to formal tax rulings — a relevant procedural instrument for taxpayers seeking certainty about the treatment applicable to specific operations. The ruling before the CGIBS succeeds and broadens the tradition of rulings before the state and municipal revenue services, now unified. The consolidated STF case law on the concept of revenue — in particular General Repercussion Theme 69 (RE 574,706, Justice Cármen Lúcia, Full Court, judged 03/15/2017), which held that the ICMS is not part of the calculation basis of PIS and Cofins — offers an interpretive paradigm applicable to defining the contours of the IBS and CBS base. Integration with the writ of mandamus instrument in the event of denial or divergent interpretation is part of the strategic design.

Rate calibration and coordination with the Senate

The CGIBS acts technically in the calibration of the IBS reference rates, providing inputs for deliberation by the Federal Senate, which has the power to set them under Article 18 of LC 214/2025. Calibration is a central element in preserving the entities’ revenue during the 2026-2033 transition and gradually adjusting the tax as the base behaves. For taxpayers, technical monitoring of the calibration is a critical element of financial planning — relevant changes can have a direct impact on price, margin and cash flow.

Coordination with the Federal Revenue Service for the CBS

Although the CGIBS administers the IBS, several functions are shared with the Brazilian Federal Revenue Service (RFB) — responsible for the CBS, the mirrored federal tax. The integration includes: integrated audit (joint inspections to avoid duplication), technological interoperability (Reform NF-e (NT 2025.002), SPED, collection systems), interpretive uniformity between IBS and CBS (essential to preserve symmetry between the mirror taxes), cashback management (CBS by the RFB, IBS by the CGIBS), and split payment (a unified withholding mechanism). The institutional coordination between the two bodies is an element of tax efficiency and a foundation for the promised simplification.

Exclusive administrative litigation — the end of fragmentation

The CGIBS’s exclusive jurisdiction over IBS litigation

One of the most sensitive and potentially transformative points is the assignment to the CGIBS of exclusive jurisdiction over the IBS administrative litigation. A taxpayer who intends to challenge an IBS assessment — regardless of the State or Municipality that is the recipient of the revenue — conducts the administrative defense before a single body, with national procedural rules, uniform administrative case law and judges selected under technical criteria. The solution replaces the previous fragmented model — ICMS assessments are challenged before state Taxpayer Councils (27 distinct ones), ISS assessments before municipal bodies (a structure that varies by municipality).

Litigation structure — instances and composition

The structure of the IBS administrative litigation, defined in LC 227/2026 and detailed by the CGIBS internal bylaws, comprises: first instance — single judges or regional technical panels; second instance — collegiate chambers with balanced federative representation; special instance — a special panel for harmonizing case law. The composition provides for the equal or balanced participation of judges appointed by States and Municipalities, with technical selection criteria (tax specialization, legal training, prior experience). Integration with the CGIBS Attorney’s Office structures the technical adversarial process.

Comparison with CARF — similarities and differences

The model of the CGIBS administrative litigation dialogues with the experience of the Administrative Council of Tax Appeals (CARF), the administrative adjudication body for federal taxes. The similarities include a collegiate structure, equal representation (in CARF, revenue authorities and taxpayers; in the CGIBS, States and Municipalities), and review power over assessments. The relevant differences: CARF is a single administrative court for federal taxes, whereas the CGIBS is a full management entity of the IBS, with normative and litigation power simultaneously; CARF has equal revenue-taxpayer representation, a model not replicated in the CGIBS; CARF is tied to the Ministry of Finance, whereas the CGIBS enjoys institutional independence. The STF case law on the pro-taxpayer tie-breaker at CARF — consolidated in ADI 6,399, ADI 6,403 and ADI 6,415 (Justice Marco Aurélio, opinion drafted by Justice Alexandre de Moraes, judged 02/26/2024) — is a relevant institutional reference for building the tie-breaker rules applicable to the CGIBS administrative litigation, still under regulatory definition. Each architecture has strategic implications for the taxpayer’s defense.

Access to the Judiciary — preserved

The CGIBS’s exclusive jurisdiction over administrative litigation does not exclude access to the Judiciary — an unwaivable principle of Article 5, XXXV, of the Federal Constitution. The taxpayer may opt for direct judicial litigation via writ of mandamus, ordinary action or declaratory action, or await the final administrative ruling by the CGIBS and challenge it in court. The consolidated case law on the relationship between administrative and judicial litigation — in particular Binding Precedent 28 of the STF (impossibility of requiring a prior deposit as a condition for the admissibility of a judicial action in tax matters, approved on 02/17/2010 on the basis of RE 388,359 and RE 389,383) and Binding Precedent 21 (prohibition on requiring a prior deposit or attachment for the admissibility of an administrative appeal) — remains fully applicable to the new regime. The cluster on tax foreclosure defense covers the enforced collection phase.

Practical impacts for large national taxpayers

For taxpayers with operations across multiple states — national retailers, hotel chains, digital platforms, industries with plants in different states, service providers with a national footprint — unification represents a substantial reduction in compliance cost. Disputes that today would be conducted in parallel across dozens of distinct jurisdictions, with the risk of divergent decisions, now have a single national forum. Legal predictability increases, but the importance of each precedent also rises — a loss at the administrative level produces a systemic national effect.

Collection, interfederative distribution and funding

Centralized collection and split payment

The CGIBS is responsible for collecting the IBS throughout the national territory — an innovative power relative to the previous model, in which each State collected the ICMS and each Municipality the ISS. Integration with the split payment mechanism — automatic withholding of the tax at the moment the operation is financially settled — operates centrally through the CGIBS. The technical architecture integrates with financial institutions, the instant payment system (Pix) and electronic payment platforms. The model is unique in international experience for the ambition of real-time collection.

Interfederative distribution of revenue

The revenue collected is distributed among States, the Federal District and Municipalities according to constitutional and legal criteria that combine: (i) the destination of the operation (destination principle — the State and Municipality of consumption receive the revenue); (ii) statutory sharing percentages between the State and the Municipalities of the same operation; (iii) equalization funds to reduce regional inequalities during the transition. The distribution is executed by the CGIBS based on algorithms defined in the single regulation and on protocols with the Federal Revenue Service. The accuracy and timeliness of the distribution are critical to the fiscal balance of the entities — especially smaller Municipalities heavily dependent on the new revenue.

Tax Benefits Compensation Fund

LC 214/2025 and LC 227/2026 structure a specific fund to compensate States for the loss of tax benefits granted under the ICMS regime and validated by LC 160/2017 — ICMS Agreement 190/2017. The fund is managed with the participation of the CGIBS and finances an orderly transition for companies operating under tax incentives (Manaus Free Trade Zone poles, specific regimes of the North and Northeast, regional agricultural incentives). The interaction between the CGIBS, the residual Confaz during the transition and the Economic and Social Development Council drives the operation. A specific cluster on presumed ICMS credit goes deeper into the topic of tax benefits during the transition.

Funding of the CGIBS — a share of revenue

The CGIBS is funded by a share of IBS revenue, capped at 0.2% — a level far below the cost of maintaining the state and municipal tax structures combined. There are transitional rules for funding between 2026 and 2033, as IBS revenue grows gradually. Predictable funding by percentage guarantees financial autonomy to the body and eliminates dependence on the federal or subnational budget — a factor of institutional robustness. Control over the funding, its application and its efficiency is exercised by the Courts of Auditors and by the Superior Council.

Transparency and publicity

LC 227/2026 imposes on the CGIBS a broad transparency regime: full publicity of the body’s acts, and monthly, quarterly, four-month and annual reports on collection, revenue distribution, offsets, refunds (cashback) and financial position. Public access to the databases — subject to the protection of individual tax secrecy — allows social control and holds the body’s management accountable. For taxpayers and tax analysts, the availability of the reports supports financial planning, scenario modeling and strategic action.

Strategic implications for taxpayers

Multinationals and companies with national operations

Multinationals with operations across several states and large national companies — retailers (Carrefour, Assaí, Atacadão, Magalu, Mercado Livre), industries with multiple plants (JBS, BRF, Ambev, Unilever, P&G), banks (Itaú, Bradesco, Santander, BB, CEF), digital platforms (Mercado Livre, iFood, Rappi, Uber, 99) — capture the greatest benefit of unification: a substantial reduction in compliance cost, the elimination of dozens of state and municipal ancillary obligations, and a single forum for litigation. The efficiency gain allows tax teams to be redirected from operational tasks (fragmented compliance) to strategic tasks (planning, litigation, governance). A cluster on consulting for entering Brazil specifically addresses the impact on foreign investment.

Companies with operations in few jurisdictions

For companies with operations concentrated in few states — small and medium-sized regional companies, local commerce — the benefit is smaller in terms of simplification, but significant in terms of predictability. The uniform national interpretation of the IBS reduces the risk of divergence among taxpayers of the same segment headquartered in different States. Integration with the regime applicable to those opting for Simples Nacional and the MEI keeps a separate treatment, but the coordination with the regular IBS regime requires monitoring.

Sectors with specific regimes

Sectors with specific regimes under LC 214/2025 — financial institutions, health plans (see health regime), agribusiness (see agribusiness regime), education (see education regime), hotel services, amusement parks, travel agencies, real estate operations, cooperative societies, diplomatic missions — have direct dialogue with the CGIBS in specific technical directorates. The CGIBS rulemaking on each specific regime must be monitored by taxpayers in the sector.

Institutional relationship strategy

A structured relationship with the CGIBS — monitoring rulemaking, presenting technical inputs in public consultations, filing formal tax rulings, acting in administrative-litigation hearings — becomes an essential part of the tax strategy of large taxpayers. Integration with sector representation via business associations (CNI, CNC, FEBRABAN, ABRAS, Abinee, ABIA, Abrasce, Brasscom, ABDI) amplifies the capacity for technical influence over the body’s normative construction. A structured presence does not replace litigation defense, but strengthens it with anticipated doctrinal output.

Preventive action and specialized litigation

Effective action before the CGIBS requires specific knowledge of the powers, the procedures and the administrative case law in formation. Preventive consulting integrates with the administrative litigation before the body and the subsequent judicial litigation, in a single service structure. Dialogue with the CGIBS Attorney’s Office, with the technical directorates and with the thematic committees structures the continuous defense of the taxpayer’s interests throughout the full implementation of the IBS up to 2033.

How TaxUp works on engagement before the CGIBS

Monitoring CGIBS rulemaking

Systematic monitoring of the Steering Committee’s rulemaking — single regulation, normative opinions, joint normative instructions with the Federal Revenue Service, acts of the technical committees, public consultations. The monitoring feeds clients’ tax planning and underpins technical positioning in formal rulings and litigation. Integration with the general discipline of tax planning ensures that the windows of opportunity opened by the body’s rulemaking are seized.

Formal tax rulings and administrative litigation

Filing of tax rulings before the CGIBS on specific operations — an instrument that offers the taxpayer full legal certainty as to the interpretation of the regulation. In the event of an assessment, technical conduct of the defense at the first administrative instance, oral argument in collegiate chambers, and the filing of a special appeal to the harmonization panel. Integration with judicial defense via writ of mandamus or ordinary action, where strategic, completes the procedural arsenal.

Structured institutional dialogue

Action in CGIBS public consultations, presentation of technical inputs to thematic committees, coordination with sector representation via business associations, and participation in technical hearings and seminars. A structured institutional presence amplifies the influence over the normative construction in formation, without replacing case-by-case defensive action. For multinationals and large national taxpayers, institutional dialogue becomes a relevant strategic element.

Integration with the overall tax-reform strategy

Action before the CGIBS integrates with the overall strategy for adapting to the tax reform — sectoral diagnosis, operational structuring, transition governance, preventive litigation and defensive litigation. Monitoring the rate calibration, the coordination with the Federal Revenue Service on the CBS, the regulation of the specific regimes and the development of the administrative litigation is part of the continued work throughout the 2026-2033 transition years.