The Tax Reform does not happen in a single event — it is a phased 7-year transition, spread across 5 successive milestones between 2026 and 2033. During this period, companies run the old system (PIS, COFINS, IPI, ICMS, ISS) and the new one (IBS, CBS, IS) simultaneously — requiring accounting, tax, operational and strategic adaptation in parallel. Each milestone has specific implications and requires advance preparation.
The 5 transition milestones
Milestone 1 — Jan 2026: Testing phase
Token IBS of 0.1% and CBS of 0.9%. NF-e 5.0 mandatory with new fields. The old system (PIS, COFINS, IPI, ICMS, ISS) at full rates. Focus: operational readiness, ERP/SAP, training of the tax team.
Milestone 2 — Sep 2026: Simples Decision 2027
A single 30-day window (September 1-30) for B2B Simples companies to choose between staying in the unified regime or opting into the regular IBS/CBS regime. Irreversible during 2027. See Simples Decision 2027.
Milestone 3 — Jan 2027: Full CBS
CBS rises to its full rate (~8.8%). PIS and COFINS are extinguished for most sectors. IPI remains residual only for the Manaus Free Trade Zone until 2033. The Selective Tax takes effect on harmful goods.
Milestone 4 — Jan 2029: IBS phase-in
IBS begins to rise progressively. ICMS and ISS start to be deactivated. Intense coexistence: a company may issue an NF-e with ICMS, ISS and IBS in the same operation according to the transition rule.
Milestone 5 — 2033: Old system extinguished
ICMS and ISS extinguished. Only IBS + CBS + IS in force. The transition is complete; the Brazilian dual system is stabilized.
Coexistence: the operational challenge
The most complex period is between 2027 and 2032, when companies run simultaneously:
- Old system: state ICMS + municipal ISS (with rates gradually decreasing)
- New system: subnational IBS (with the rate gradually increasing) + full federal CBS + IS
NF-e 5.0 must record both systems. Accounting must segregate revenue and taxes by regime. ERP/SAP must be configured to switch regimes depending on the operation. Companies that do not structure the ERP well in 2026 will face continuous rework until 2033.
A single window for retroactive credits
Before the current PIS/COFINS regime ends (Jan 2027) and ICMS ends (by 2033), there is a limited window to recover retroactive credits not yet used — Theme 69 (exclusion of ICMS), Theme 779 (essential inputs), Theme 163 (INSS indemnity amounts), ICMS credits on fixed assets, overpaid ICMS-ST, and dozens of other theses.
After the regime ends, these credits do not disappear legally (the five-year statute of limitations still applies), but recovery becomes more complex because the collection system is different. Recovery is best pursued during 2026.
Multi-year planning is mandatory
The transition does not allow year-by-year planning — it requires a multi-year view. Decisions made in 2026 have a direct impact in 2029, 2031, 2033. Examples:
- Corporate reorganization: pre-Reform spin-offs/mergers may capture savings that the new system eliminates
- Credit stock: the volume of accumulated PIS/COFINS credits may be converted into CBS in the transition (specific regulation)
- Operation location: state incentives that depend on ICMS lose value — companies in incentivized states/regions must reassess
- Long-term contracts: multi-year contracts with a tax clause must contemplate the transition
Critical decision windows
- May-Jun 2026: impact diagnosis and initial modeling
- Sep 2026: Simples Decision 2027 (irreversible during 2027)
- Oct-Dec 2026: ERP adjustments, training, recovery of pre-Reform credits
- 2027: first operational year under full CBS, fine-tuning
- 2028: preparation for IBS phase-in, reassessment of state incentives
- 2029-2032: intense coexistence, parallel management of both systems
- 2033: transition complete, old system extinguished
References and official sources
Multi-year transition plan — free assessment
Mapping of the Reform’s 5 milestones for your specific company, identification of opportunity windows and a realistic 2026-2033 readiness timeline.
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