Brazil's Receita Federal delays mandatory split payment until 2028

The Brazilian Federal Revenue Service (Receita Federal) has announced that the mandatory implementation of the ‘split payment’ system for transactions between companies will be delayed until 2028. This mechanism, a key component of the country’s consumption tax reform, is designed to automatically separate and collect taxes—specifically the Imposto sobre Bens e Serviços (IBS) and the Contribuição sobre Bens e Serviços (CBS)—at the moment of financial settlement.

The delay from the initial 2027 expectation is attributed to the technological complexity of the project, which requires the integration of more than 200 financial institutions. While the system is expected to be ready early next year, it will only become mandatory once all payment methods and institutions are fully integrated into the platform.

During the transition period, the government plans to introduce the mechanism optionally through various payment methods, such as electronic transfers and PIX, to allow for testing and gradual adoption. The system aims to increase collection efficiency, reduce delinquency, and combat tax evasion, though experts note it will require significant adjustments to corporate cash flows and financial processes.