Brazil’s consumption tax reform (Constitutional Amendment 132/2023) replaces PIS, COFINS, ICMS and ISS with two value-added taxes: the federal CBS and the state-and-municipal IBS. 2026 is the test year, CBS applies in full from 2027, IBS gradually replaces ICMS and ISS between 2029 and 2032, and the new system is fully in force in 2033. For a Chinese-owned subsidiary, that means pricing, ERP and cash flow all have to be redesigned to the new rules.
Brazil’s consumption tax reform is phased in. Data as of September 2026:
The rates in the test year are small, but what is demanded of the systems is already the real thing: e-invoicing technical note NT 2025.002 requires NF-e and NFC-e to carry the IBS and CBS groups, the tax classification code (cClassTrib), new CSTs and new operation indicators. From August 2026, invoices from companies under the general regimes (Lucro Real and Lucro Presumido) that leave those fields blank are rejected by the state tax authority.
For a newly formed Chinese subsidiary this is good news: invoicing can be configured to the new system from day one, with no legacy migration to survive. Companies already operating in Brazil need to check right now whether their ERP, e-commerce and invoicing systems have been updated.
Split payment is phased in from 2027: when the customer pays, the payment institution routes the IBS/CBS portion straight to the tax authorities and the company receives only the net amount. Companies stop collecting the full amount and paying tax monthly, which changes the working-capital cycle.
Payment flows have to carry transaction identifiers, so the Pix, credit card and boleto integrations all need adjusting. JBKR has already prepared client systems for split payment across Mercado Pago, Pix and boleto flows.
Under the new system tax is levied at destination and shown separately on the invoice — tax outside the price — unlike today’s practice of embedding several taxes in it. The burden on interstate sales changes, and pricing models that relied on state ICMS incentives have to be recalculated.
Chinese subsidiaries should state explicitly in their 2026–2027 dealer contracts and price lists whether quotes include IBS/CBS, how rate changes during the transition are passed through, and who absorbs the difference. A tax lawyer drafts those clauses; the accountant runs the numbers.
The Kingdee, Yonyou or SAP systems used at Chinese headquarters do not issue Brazilian NF-e. The usual arrangement is for the Brazilian subsidiary to run a local ERP or invoicing module that calculates the tax and issues the invoice, and to synchronise orders, inventory and financial data with the headquarters system through an interface.
That interface has to handle product master data carrying NCM and cClassTrib, tax calculated by destination state and municipality, returns referencing the original invoice, digital-certificate signing, and the national NFS-e standard for service invoices. JBKR has maintained the same Brazilian ERP since 2009 and has already delivered the NT 2025.002 and national NFS-e upgrades for its clients.
Execution splits three ways. The accountant handles the regime choice, tax calculation and filings; the tax lawyer handles contract clauses, the transition of incentives and disputes; JBKR handles the systems layer — invoicing, ERP interfaces, payment flows and data. beonshore puts all three on one roadmap and tracks progress monthly under Local presence and ongoing support.
If your company has not been formed yet, handing this playbook to your future accountant and building to the new system from day one is the cheapest path available.
beonshore provides business and technology consulting. It does not provide legal, accounting, customs or immigration services: we identify the requirements, prepare you and introduce licensed professionals, who contract directly with you.
