Tax Reform 2026: What Changes for You Day-to-Day

What is Happening

2026 marks the official start of the Tax Reform transition in Brazil. Starting in January, the so-called "operational testing phase" began — with real financial transactions, but at symbolic percentages.

The main change is the introduction of the Dual VAT: a combined rate of 1% on goods and services, split between CBS (federal, 0.9%) and IBS (state/municipal, 0.1%).

Will it Get More Expensive?

No, at least not right now. The 1% rate in this first year is offset by reductions in other taxes. The goal is to test the mechanics of the system without increasing the overall tax burden.

The complete transition will last until 2033. Each year, the VAT will gradually increase while the old taxes (ICMS, ISS, PIS, Cofins, IPI) decrease.

What Changes in Practice

In day-to-day life, in 2026 you will notice little difference. But it’s worth paying attention to a few points:

• Invoices: will start to show the breakdown of CBS and IBS, even if in small amounts
• Cashback for low income: the reform provides for tax refunds for lower-income families, but the regulations are still being defined
• Services: sectors such as health, education, and public transport will have reduced rates or exemptions
• Basic food basket: essential foods will have a zero rate

How to Prepare

The reform does not require immediate action from consumers, but it is a good time to:

• Organize your budget: knowing exactly how much you spend in each category helps identify any future impact
• Follow the transition: business owners and freelancers should prepare for changes in the tax regime
• Review investments: the reform may affect specific sectors — real estate, retail, services. Diversifying is always wise.

The most important thing: have clarity about your financial situation. Those who organize their money by purpose are better prepared for any change.