2028: that is the year the so-called split payment should finally become mandatory in sales between companies, Brazil's federal revenue service told the news site g1 on Sunday. For shoppers, nothing changes at the register: the tax stays embedded in the price, as it always has been. For businesses, the decision buys a full extra year to adapt before the new collection system becomes the rule.

The initial plan was to have the mechanism available in early 2027, when the CBS, the new federal tax created by Brazil's consumption tax reform, takes effect. Juliano Neves, undersecretary for corporate management at the revenue service, said the government system will be ready early next year. The requirement, however, only arrives after more than 200 financial institutions are connected to the platform, a process expected to unfold gradually through 2027.

So in 2027 the rule will be different: optional use, one payment method at a time, starting with electronic funds transfers and static Pix, Brazil's instant payment system. "We will start on an optional basis, payment method by payment method... and we will expand models over the year", Neves said. In each transaction, a company will be able to choose to sell with or without the mechanism.

"For the companies that will be affected, the first message is: stay calm, split payment will not become mandatory all at once... Nobody will be required to use it while it is not available for every payment method. Probably 2027 will not be enough time", he added.

What split payment means

Today a company receives the full value of a sale, sets aside the tax share and pays the government at the end of the month, using a collection document known as Darf. Under split payment, the bank splits the money at the moment of the transaction: the tax slice goes straight to the federal, state and municipal governments, and the seller keeps the rest. With a 20% rate, a 100-real sale, roughly a basic grocery run, would send 20 reais to the treasury instantly and leave 80 reais for the seller.

The model aims to cut tax evasion and let firms recover tax credits on the same day. Without a mandatory split payment in 2027, companies will keep issuing invoices and paying taxes at the end of the month, as they do now. Refunds of tax paid at earlier stages of production will take up to two months, the equivalent of waiting two paychecks to see the money again.

There is a shortcut, the Recolhimento pelo Adquirente (RAD): the buying company collects the tax itself and gets the credit faster, while the seller receives the amount already net of tax. The 2028 date, though, is not yet written into any rule. According to InfoMoney, which reports that the revenue service confirmed the timeline to the newspaper O Estado de S. Paulo, the schedule depends on banks and payment operators adapting, and the formal requirement will only come once every method is ready.