Brazil Tax Reform: Companies Update ERPs for Split Payment, CBS/IBS Testing

Brazil's tax reform has entered its initial transition and operational testing phase as of January 2026, with companies now incorporating the test rates of CBS and IBS into their systems. Tax departments are preparing for the split payment mechanism, scheduled for 2027, which will automate collection of the new dual VAT taxes. This signals a significant compliance shift for businesses, with potential implications for cash flow and operational costs.