Brazil’s Tax Reform and Its Impact on Electronic Invoicing

Introduction of Dual VAT System: Brazil’s tax reform, enacted through Constitutional Amendment No. 132, replaces five existing taxes with a Dual VAT model consisting of the federal Contribution on Goods and Services (CBS) and the state/municipal Goods and Services Tax (IBS). This aims to simplify the tax system, enhance transparency, and reduce bureaucratic burdens for businesses.
Key Dates and Document Changes: Effective October 1, 2025, updates to various electronic fiscal document layouts (NF-e, NFC-e, etc.) will be required to align with the new CBS and IBS rules. Businesses must adapt their invoicing systems to include new fields and validation criteria, with mandatory adoption of the NFCom standard beginning November 1, 2025.
Operational Adjustments and Compliance: Companies will need to restructure their internal processes and update management systems to comply with the new tax regulations. This includes adapting electronic invoicing practices, revising tax codes, and ensuring stronger oversight by tax authorities.