Brazil: Further updates to electronic invoicing due to tax reform

The government on December 6, 2024, published an updated version of Technical Note NT 2024.002 to incorporate additional validation rules, which will be used for calculating the amount of the new indirect taxes (CBS and IBS) due monthly.

Background

Brazil’s Congress is currently debating a major tax reform to introduce the new dual value added tax (VAT) regime under the tax reform bill. Under the tax reform bill, Brazil would enact the following harmonized (federal and state) taxes:

• A tax on goods and services (imposto sobre bens e serviços—IBS) that would replace the state VAT (imposto sobre circulação de mercadorias e serviços—ICMS) and the municipal tax on services (imposto sobre serviços de qualquer natureza—ISS)
• The contribution on goods and services (contribuição sobre bens e serviços—CBS) that would replace the federal PIS/COFINS contributions

To prepare for the reform, the Brazilian government has circulated the initial set of changes associated to electronic invoices (e-invoices) for goods issued by local taxpayers. The initial version of Technical Note NT 2024.002 outlined new groups of fields that will be required to be informed in the e-invoices of goods (NF-e model 55) and e-invoice of goods to final consumer (NFC-e model 65). 

Proposed updates to the technical note

The update includes a new tax code (CST in Portuguese) for CBS, IBS and IS (selective tax). While the use of CST codes is widely known by Brazilian taxpayers under the current indirect tax system (e.g., PIS, COFINS, IPI, and ICMS), the new set of values for CBS, IBS, and IS brings a reformulated pattern, providing additional details and a more objective determination on how each item in the e-invoice will be taxed by the new tax types.

Regarding the expected timeline for the implementation of the changes, dates remained unchanged, and will be as follows:

• From September 1, 2025, through October 30, 2025, changes brought by NT 2024.002 will be available at the testing environment of the e-invoice portal.
• From October 31, 2025, through December 31, 2025, changes will be made available at the production environment of the e-invoice portal; however, taxpayers are not expected to populate any of the additional fields—as CBS and IBS will only become effective on January 1, 2026.
• Starting on January 1, 2026, new fields and validation rules will become fully in effect.

Since the Brazilian Congress is still debating the outlines of the new indirect tax systems, it is likely that the government will further update Technical Notes NT 2024.002 to align it with the additional mandates yet to be published or other technical issues considered by the tax authorities to adapt the Brazilian e-invoicing system to the new indirect tax reform.
 

For further information, contact a KPMG tax professional:

Paula Pignatti Smith | ppsmith@kpmg.com

Atila Vaccaro Pidoni Mota | atilamota@kpmg.com