With the beginning of 2025, another step has been taken in the implementation of the Tax Reform in Brazil with the publication of Lei Complementar nº 214/2025 (“LC 214/2025”), which established the Imposto sobre Bens e Serviços (“IBS”) and the Contribuição Social sobre Bens e Serviços (“CBS”).
Although there are still presidential vetoes pending deliberation by the Congresso Nacional, which may be rejected and, consequently, have their provisions reincorporated into LC 214/2025, most of its text has been sanctioned, consolidating important changes in the tax system.
Among the various innovations introduced, one highlight is the mechanism of tax collection upon financial settlement, also known as split payment.
This mechanism represents a significant transformation in the process of collecting taxes on consumption by establishing a system based on the withholding and automatic collection of these taxes through integrated payment solutions.
In practice, when processing payments related to transactions subject to consumption taxation, payment service providers and participants in payment arrangements will withhold and automatically remit (hence the term “split payment”) the amount corresponding to the taxes due on the transaction. Thus, only the net amount, after tax deductions, will be credited to the supplier of goods, services, or rights.
The split payment mechanism has already been adopted in some countries as a measure to reduce tax evasion and improve collection efficiency. For example, a similar model is found in Polônia, where implementation was carried out concerning specific transactions and aimed at reducing fraud in the collection of the Imposto sobre o Valor Agregado (“IVA”).
There have been other experiences in Europe, such as in Itália and Romênia. However, it is important to highlight that foreign experience demonstrates that, despite its advantages, there are significant challenges in adopting this tax settlement mechanism.
For the Brazilian market, split payment also represents a substantial change compared to the current model, in which, in most cases, taxes are added to sales prices and transit through the supplier’s bank account before being collected later.
The split payment system provided by LC 214/2025 encompasses three categories: split padrão, split simplificado, and the possibility of tax collection by the purchaser.
The split padrão, also called “inteligente” in the market, will be applied to transactions between companies and their suppliers. In this modality, through the integration between payment systems and the databases of the Comitê Gestor do IBS and the Receita Federal do Brasil (“RFB”), the exact amount of tax to be collected by the taxpayer at the time of financial settlement will be individually calculated, already discounted from credits related to previous payments made in the operational chain.
The split simplificado is an optional regime applicable to transactions where the purchaser is not a regular taxpayer of IBS and CBS. In this modality, instead of collecting taxes individually for each transaction, the company may choose to apply a pre-fixed percentage of IBS and CBS, defined by the Comitê Gestor do IBS (for IBS) and by the RFB (for CBS). This regime may also apply in the initial implementation phase of the system, in case the split padrão is not yet operational at an adequate level for major electronic payment instruments.
It is important to mention that in cases where split payment is not available, the legislation provides for the possibility that the purchaser, who is a taxpayer of IBS and CBS under the regular regime, collects the IBS and CBS due on the transaction. However, LC 214/2025 addresses this alternative mechanism outside the subsection related to split payment rules, without detailing the mechanisms to implement this option.
It should be noted that in cases where there is excess tax collection through split payment, as well as in the case of payment by the purchaser of goods and services, the legislation provides that the excess amount may be refunded to the taxpayer within three business days after the completion of verification by the Comitê Gestor do IBS and the RFB, a measure aimed at mitigating the impacts of tax prepayment on corporate cash flow.
Nevertheless, as a general rule, the legislation also provides for a regular process for the compensation and refund of accumulated tax credits due to the characteristics of the transaction. This process is expected to be faster compared to the current reality, with tax authorities required to review refund requests within deadlines ranging from 30 to 180 days.
Based on all the above, it can be inferred that split payment has many advantages but also brings relevant challenges both for taxpayers and the Administração Tributária.
For the Administração Tributária, the speed of the receipt process and the reduction of default rates caused by various factors are undeniably advantages of this model.
On the other hand, the challenges revolve around the creation and maintenance of an automated consultation and collection system, which must still be supported by a robust regulatory environment that can ensure security and privacy of tax data. Moreover, although automation facilitates tax collection, there must be flexible mechanisms that efficiently address exceptions and tax disputes.
For taxpayers, the payment process via split payment may also bring advantages related to simplifying the tax collection process, reducing compliance errors, increasing legal certainty, and lowering costs related to ancillary obligations and tax disputes in general.
However, in the technological field, there will be a need for investment and adaptation of technological infrastructure. In this regard, especially smaller companies with limited technological infrastructure may have difficulties adopting the new model due to the need for an initial investment.
Beyond digital infrastructure, tax prepayment will reduce the immediate cash availability of companies. Thus, companies that previously optimized their cash flow by relying on the tax payment deadline will lose this advantage, potentially needing to resort to loans to cover the lack of immediate capital.
At this point, certain sectors may be more significantly impacted, especially those with low-profit margins, those that conduct installment sales transactions, and sectors heavily dependent on cash flow for their daily activities. For example, among the most impacted sectors, the retail sector stands out due to its business model based on a high volume of transactions, usually conducted with tight margins.
Still regarding the financial impact, the risk of excessive tax withholding cannot be ruled out, which generates the need for a quick refund process to avoid losses for taxpayers. Likewise, sectors that operate with accumulated tax credits may be affected by the prepayment requirement.
Thus, the new system will require that corporate financial departments, in conjunction with tax specialists, conduct studies to review financial management, particularly concerning taxpayers’ cash flow. The timely and individualized analysis of impacts and strategic planning will be essential to mitigate risks and leverage opportunities in this new tax environment.
