Deadline for Brazil's Simples firms to choose IBS and CBS tax regime ends Friday

Friday, Oct. 30, is the deadline for micro and small businesses in Simples Nacional, Brazil's small-business tax regime, to decide whether to pay IBS and CBS, the two new consumption taxes created by the country's tax reform, under the regular regime, outside the Simples single payment slip. The choice applies to the first half of 2027, when the new rules take effect. As of Thursday, Oct. 29, Brazil's Federal Revenue Service had recorded 1,000,142 elections, according to agency data reported by Jornal de Brasília and Brasil em Folhas. Those outlets said the Revenue Service has stated the deadline will not be extended.

Simples Nacional is a simplified tax regime for companies with annual revenue of up to R$4.8 million, in which several taxes are paid through a single slip, the DAS (Simples Nacional collection document). Under the consumption tax reform, the IBS (a goods and services tax for states and municipalities) and the CBS (a federal goods and services contribution) will gradually replace existing taxes. Simples companies can keep paying the new taxes through the DAS or calculate them separately under the so-called regular regime, while keeping all other taxes in Simples. Accountants and businesses have dubbed the model "hybrid Simples."

The original deadline was Sept. 30. Resolution No. 194 of the Simples Nacional Management Committee (CGSN), published in late September, pushed it to Oct. 30 after talks with Sebrae, the small-business support agency, and the Federal Accounting Council, according to Serpro, the state-owned technology company that built the election system. The same resolution set Oct. 15 as the deadline to apply to join Simples in 2027. Companies whose applications were denied over debts or other issues also have until Friday to resolve them.

What changes for businesses

The election is voluntary. Companies that do nothing will keep paying IBS and CBS within Simples, under the simplified regime. According to Serpro, the regular regime may suit companies that need to pass full IBS and CBS credits on to customers, businesses that buy many taxed inputs and sectors that accumulate credits. Agência Brasil, the state news agency, notes the decision matters most for companies that sell to other businesses, because buyers can deduct credits for taxes paid on purchases. Serpro stresses that each company is responsible for judging whether the election pays off, and Agência Brasil recommends modeling both scenarios before deciding.

The election is made on the Federal Revenue Service's services portal, and the system automatically checks whether a company is eligible. It applies from January to June 2027. Between Nov. 3 and Dec. 20, companies that opted in may withdraw; according to Agência Brasil, the withdrawal is irrevocable, meaning it cannot be undone later. According to ND Mais, the rules do not apply to MEIs (individual microentrepreneurs).

Companies that miss the deadline still have options. Starting in 2027, election windows will open each March and September. An election made in March 2027, for example, applies to the second half of the year, according to Serpro. Friday's deadline, however, sets a company's regime for the first six months of the new system.

For comparison, the Revenue Service had received 891,294 requests for the regular regime as of Oct. 15, according to an official tally published that day. Simples Nacional includes about 7 million active CNPJs (corporate taxpayer IDs), according to Revenue Service data cited by Convergência Digital. On applications to join Simples in 2027, the Revenue Service has approved 299,921 and denied 357,828, according to Jornal de Brasília.

Separately, the Revenue Service and the IBS Management Committee (CGIBS) said on Thursday, Oct. 29, that they are discussing extending to Nov. 30 the deadline for cooperatives to formalize their election of the special IBS and CBS regime. The change still needs approval from CGIBS governance bodies and must be formalized in a regulation. The discussion does not affect the deadline for Simples companies.

What to watch next

• Oct. 30: deadline to elect the regular IBS and CBS regime and for companies denied entry into Simples to resolve pending issues.
• Nov. 3 to Dec. 20: window to withdraw elections made in 2026.
• Nov. 30: possible new deadline for cooperatives, if CGIBS approves the extension.
• Jan. 1, 2027: elections take effect.
• March 2027: new election window, effective in the second half of the year.