Companies enrolled in Brazil's Simples Nacional, the simplified tax regime for small businesses, have until September 30 to choose between a "hybrid" model for paying the country's new consumption taxes and the traditional Simples, known as the "pure" model. The decision covers the first half of 2027. On Friday (18), Robinson Barreirinhas, head of the Federal Revenue Service, said there is an agreement with the committee that manages the IBS, the tax shared by states and municipalities, to let firms reverse the choice after the Senate sets the CBS rate, a decision expected by the end of this year.
According to news site G1, the announcement changes a calendar that until now let Simples companies reconsider their choice only until the end of November, when the rate may still be undefined. In Barreirinhas' words:
"The company chooses in September, but if in November it decides this no longer makes sense, it can go back. And we went further: if the Senate sets the rate only after that deadline, we guarantee nobody will be harmed. The IBS management committee agreed that, if the rate is set after November, companies will still be able to drop their choice"
Two models, one semester at a time
Under the hybrid model, a company stays in the Simples for its other taxes but starts paying the CBS, the federal levy that replaces PIS and Cofins, and the IBS, which replaces the state ICMS and the municipal ISS, through the regular regime. That lets it claim credits on its purchases and pass credits on to buyers, a feature that matters to firms selling to other companies. In the pure Simples, the company keeps a single unified payment and, as a rule, neither claims nor passes on credits. Under Revenue Service rules, any firm making no choice in September automatically stays in the pure model from January to June 2027. A new window opens in March for the second half of the year.
Federal Revenue data show the Simples Nacional covered 7.35 million companies at the end of 2025, excluding individual microentrepreneurs, equal to 28.6% of all active companies in Brazil. Microentrepreneurs, known as MEIs, have no model to pick: their enrollment window remains in January. Companies registered with tax authorities between October and December 2026 follow their own rule, with the choice made at opening valid for the rest of 2026 and all of 2027.
For business owners, the choice determines how the tax moves through the supply chain: selling to other companies can become more competitive under the hybrid model, since clients can deduct credits, but the firm leaves the single payment and takes on the regular assessment of two taxes. For consumers, the effect is indirect: the model each supplier picks shapes how much credit is recovered along the chain, and therefore the cost embedded in the final price.