Small Brazilian companies enrolled in the Simples Nacional, the simplified tax regime for micro and small businesses, have until the end of September, ten days from the announcement, to choose between a "hybrid" system for the new consumption taxes and the traditional model, known as "pure" Simples. The requirement comes from a resolution by the regime's management committee (CGSN), and the choice made this month applies to sales in the first half of 2027. It follows the consumption tax reform approved in 2023, which created the CBS and the IBS.
Under the hybrid model, the company stays in the Simples for other taxes but starts paying the CBS, the federal levy replacing PIS and Cofins, and the IBS, shared by states and municipalities in place of ICMS and ISS. It can then take credits on its own purchases and pass credits on to its business customers. In the pure model, the company keeps the current setup: no credits to claim and none to pass on.
Where the company sits in the chain decides
The math depends on the company's place in the production chain, tax lawyer Rodrigo Totino, a partner at MBT Advogados Associados, told g1. Firms that buy from and sell to other companies tend to gain from the hybrid, because they generate credits their buyers can use. Firms selling straight to final consumers tend to do better in the pure Simples. Juliano Neves, a deputy secretary at the Federal Revenue Service, told g1 that most Simples companies sell directly to final consumers and do not need the hybrid.
The decision is not final. According to the Federal Revenue, a company that opts for the hybrid this month and regrets it can revisit the choice after the Senate sets the CBS rate. Revenue secretary Robinson Barreirinhas said on Friday (18), according to SpaceMoney, that there is an understanding with the IBS management committee to allow the review and that senators may decide by year end. The window opens again in March, for the second half of 2027, and the option can be canceled until November 30.
How many companies, what changes
The Simples Nacional held 7.35 million companies at the end of 2025, excluding MEIs (individual microentrepreneurs) and nanoentrepreneurs, equal to 28.6% of all active companies in Brazil, according to Revenue data cited by g1. Moving to the hybrid brings paperwork: more detailed invoices, credit tracking by supplier and, from 2028, split payment, which withholds the tax at the moment of an electronic payment and ends the possibility of delaying collection. "Leaving this evaluation to the final days can greatly increase the risk of a wrong decision," said Welinton Mota, tax director at Confirp Contabilidade.
For owners, the practical test is the customer: selling to other companies tends to favor generating credits for buyers, while serving final consumers allows waiting for the rates to be set. For consumers, the effect shows up in prices: under the hybrid, tax falls only on the value added at each step, because credits offset along the chain, while the pure model keeps the current tax embedded in the price.