Split Payment.
Withholding at settlement.

What split payment is (and what changes from today)

Under the current system, tax is embedded in the price and flows through the seller’s account: the company receives the full invoice amount, assesses ICMS, ISS, PIS and COFINS, and remits the following month. Between receipt and remittance, the tax amount works as working capital — and when the company fails, falls behind or evades, the tax authority is left without the tax the consumer has already paid.

Split payment reverses this logic. LC 214/2025 lists the split as one of the ways of extinguishing the debt of IBS and CBS (art. 27, III) and governs how it works in articles 31 to 35: the party that segregates and collects is the payment service provider, at the exact moment the transaction is settled.

In practice, the flow of a payment with split has five moments:

1. Issuance — the supplier issues the tax document with IBS and CBS highlighted and originates the charge (boleto, Pix, TED, TEF) already carrying the tax fields and the identification of the tax document.
2. Payment — the customer pays the full amount. Nothing changes for the payer.
3. Query — before releasing the funds, the payment system queries the shared-governance platform of the Federal Revenue Service and the IBS Steering Committee to learn how much of that debt is still open.
4. Segregation — the provider separates only the amount due and passes it to the Union (CBS) and to the Steering Committee (IBS).
5. Net settlement — the supplier receives the amount without the tax. The buyer’s credit arises tied to that confirmed payment, not merely to the amount highlighted on the invoice.

This last point explains why split payment is more than a collection mechanism: LC 214 connects the taking of credits (arts. 47 to 56) to the actual extinguishing of the debt at the previous stage. The split is the fastest route to that extinguishing — and, for that reason, it tends to become the market standard in business-to-business operations, even in the optional phase.

Legal basis: where each rule is written

Anyone wishing to check the rules at the source finds split payment across normative layers, each with a role:

Reading them together matters because each layer uses its own vocabulary — that is where much of the confusion about the “procedures” of split payment comes from, addressed in the next section.

Procedures and modes: the full map

LC 214/2025 structures split payment into two procedures — standard and simplified — surrounded by contingency safeguards. On top of this legal base, the technical layer of the Public Platform broke the standard procedure into operating modes the market nicknamed “super smart” and “off-line”. The two terminologies describe the same system, on different planes.

Standard procedure (“smart” split) — art. 32 of LC 214; art. 29 of the Decree

It is the core of the system. The originator transmits to the payment provider the information that ties the payment to the operation and identifies the IBS/CBS amount. Before releasing the funds, the provider queries the platform and segregates only the difference between the debt indicated on the tax document and the portions already extinguished — if part of the tax on that invoice has already been offset with credits or paid, the system does not withhold again.

Within the standard procedure, the operation happens in two modes:

• Full mode (“super smart”) — there is near real-time communication with the Revenue Service and the Steering Committee. In the Integration Manual, this is the Super Smart Return flow: the authority returns to the provider the corrected amount and the still-open tax amount of that transaction, and the segregation comes out at the exact value. It applies to boleto, dynamic Pix and automatic Pix.
• Alternative mode (“off-line”) — when the query is unavailable, the provider withholds the full highlighted amount and the excess is refunded to the supplier within 3 business days, counted from settlement or from the linking of the operation to the tax document, whichever occurs last (LC 214, art. 32, § 4).

Simplified procedure — art. 33 of LC 214; art. 30 of the Decree

Designed for retail and for operations in which the acquirer is not a regular-regime taxpayer (final consumer, Simples opters). Instead of a query, a preset percentage — set by joint act of the RFB and the Steering Committee — is applied to the value of the operation, with adjustment at the close of the assessment period.

Three rules of the regulation deserve attention:

• Originating a transaction without identifying the CBS/IBS amounts means an automatic election of the simplified procedure (Decree, art. 30, § 3). Filling it in wrong already means opting in.
• Collection under the simplified procedure grants no right to credit for the regular-regime acquirer (Decree, art. 30, § 7, II) — a strong reason for B2B to demand the standard procedure from the supplier.
• The joint act may make the simplified procedure compulsory in B2C operations while the standard procedure does not yet work properly across the main payment instruments.

Contingency and collection by the acquirer — art. 32 (safeguards) and art. 36 of LC 214

For system failures, the law itself provides for temporary full withholding with a refund in 3 business days (the “off-line” mode above). Payments by an instrument that does not allow segregation — cash, for example — are left out of the split: in those cases the law offers collection by the acquirer (art. 36), a standalone way of extinguishing the debt listed in art. 27, IV.

The 12 payment arrangements covered

LC 214 delegated to the regulation the list of arrangements subject to the split. Decree 12,955/2026 (art. 28, § 5) brought twelve, and art. 33 distributed them across rollout stages:

Two practical points. First: cards were not left out — they simply enter later, on a mandatory basis, together with B2C operations. Second: cash and check do not appear on the list because they are not electronic payment arrangements; for them, collection by the acquirer applies (art. 36).

Timeline: from constitutional text to full operation

The message for finance is direct: 2026 is the last full year with no tax leaving at settlement. Whoever operates B2B with boleto, Pix and transfers should treat 2027 as the adaptation horizon — even if optional, large buyers’ adoption tends to pull the whole chain along, because their credit now depends on the confirmed payment. See the full calendar in the Reform transition period.

The Public Platform: who does what

The infrastructure that connects banks and the tax authority is the Split Payment Public Platform, specified in the Integration Manual v1.0 (Joint Act RFB/CGIBS no. 2/2026). It works as a communication hub: it receives the events from payment providers, validates, records for audit and passes them on to the Federal Revenue Service and the Steering Committee — without executing any business rule.

The manual describes seven data flows — from Transaction Initiated to the Segregation Report and the Super Smart Return queries — and standardizes errors, audit and end-to-end traceability. For the non-financial company, the technical detail matters less than the consequence: the quality of the charge data now determines the tax treatment of the payment. A charge originated without the IBS/CBS fields falls automatically into the simplified procedure, with the disadvantages seen in the previous section.

Impact on cash flow: the point that hurts

Split payment removes from the company’s account an amount that today stays there for weeks: the tax embedded in the invoice. The effect is one of transition — what is lost is the float, not margin — but it needs to be planned.

Worked example

Consider a B2B sale of BRL 100,000, with a combined IBS+CBS standard rate estimated at 26.5%*:

*Illustrative rate, based on the reference discussed in the regulation; the final percentages will be set by Senate resolution and Steering Committee acts.

Receivables anticipation: the rule that changes the game

Decree 12,955/2026 (art. 31, III) is explicit: the early settlement of receivables does not change the segregation obligation. If the company anticipates the invoice with a bank or FIDC, it receives the net amount early — but the split happens when the customer pays each installment, on the original calendar. The cost-benefit of anticipation and securitization must be recalculated with the tax out of the base.

What to do (before 2027)

• Re-project cash flow: a 2027 budget with receipts net of IBS/CBS on B2B operations in the split.
• Review terms and contracts: an explicit tax clause, with discount and term policy recalibrated without the float.
• Reassess working-capital lines: “tax payable” stops financing the operation; in return, refunds and reimbursements become faster (next section). See also the IBS/CBS financial credit.
• Secure the standard procedure: well-originated charges avoid the automatic drop into the simplified procedure — which withholds at a sector average and grants no credit to your customer.

Refunds and reimbursement: the new deadlines

The split design comes with shorter refund deadlines — the counterpart designed for the cash-flow squeeze:

Absent a ruling by the authority within the deadline, the credit is reimbursed automatically within the following 15 days; if the delay persists, the balance becomes corrected by the Selic rate. For structurally creditor companies (exporters, heavy investment), split payment speeds up the credit cycle — one of the few points where the new system returns cash instead of taking it.

Special cases

Simples Nacional

Whoever stays in the unified regime has no split payment — they pay via the DAS. The exception is the opter who chooses to assess IBS/CBS separately, in the regular regime (“hybrid Simples”): the IBS/CBS portion of their operations enters the split logic. This choice connects to the Simples Decision 2027, because the credit the B2B customer takes changes in size depending on the option.

Manaus Free Trade Zone

The regulation created its own rule (Decree, art. 29, § 7): in transactions destined for the incentivized industry of the Manaus Free Trade Zone, the originator may apply the incentive percentages on each CBS debit to reduce the segregated amounts. The benefit is considered at the moment of withholding — without withholding in full only to refund later. The topic dialogues with the end of ICMS incentives.

Retail and B2C

Sales to the final consumer enter only in stage 2, in all arrangements simultaneously, with the simplified procedure enabled (and possibly compulsory at the start). Credit/debit cards, the main means in retail, are out of stage 1 — commerce will have more time to adapt, but with a fixed withholding percentage when it arrives.

Returns, cancellations and cards

Cancelling a sale with an executed split requires a reversal of the segregated tax — the operating procedures will be detailed in a joint act, and the ERP needs to record the payment ↔ tax-document link to support the settling. With cards, segregation will occur at settlement to the merchant, which places the acquirers at the center of stage 2.

International experience: what worked and what failed

Brazil did not invent split payment — but it will be the first to apply it broadly, integrated with the instant-payment system and the electronic tax document.

The lessons the Brazilian regulation tries to incorporate: gradualism (two stages, optional start), fast refund of excess (3 business days, against weeks in the Polish model) and segregation computed on the open amount — instead of the gross withholding that choked cash flow in the European experiences. Whether the technology will deliver this design is the central bet of 2026–2027.

Risks and points of attention

• Working capital: the end of the tax float arrives together with the ICMS transition — companies leveraged on supplier terms feel it first.
• Automatic drop into the simplified procedure: a charge originated without the IBS/CBS fields becomes an automatic election of the fixed percentage (Decree, art. 30, § 3) — with no amendment for that operation and no credit for your customer in the regular regime. An IT error becomes a commercial cost.
• Reconciliation: finance now reconciles three amounts per receipt (gross invoiced, net received, tax segregated) — and must pursue refunds within the 3-business-day deadline.
• Regulatory pending items: still depending on a joint RFB/CGIBS act are the stage 2 schedule, the simplified percentages by sector, the enabling of each arrangement and the cancellation procedures. This page is updated with each act published.
• Financial sector: providers and acquirers bear the integration cost (seven API flows, time windows, end-to-end audit) — a cost that tends to be passed on in fees.

How to prepare: the TaxUp roadmap

The Reform will reward those who treat 2026 as a project year, not a year of waiting. With split payment this is literal: whoever reaches 2027 with well-originated charges and a re-projected cash flow turns the obligation into a competitive advantage — including in the eyes of the customer, whose credit depends on the confirmed payment.

— TaxUp Team, Tax Practice