Among the various new features introduced by Tax Reform, split payment, or “fractional payment,” stands out. It’s one of the methods of collecting the IBS (Tax on Goods and Services) and CBS (Contribution on Goods and Services). It’s designed to reduce tax evasion, default, and avoidance. The system’s dynamics are outlined in Article 32 of Complementary Law (LC) No. 214/2025.

The logic of the system is simple: upon payment for a good or service, the IBS/CBS portion is immediately separated by the financial institution and transferred to the public coffers, with only the remaining net amount being forwarded to the supplier.

For this procedure to be successful, the supplier must record all the necessary information on the electronic tax document to link the operation to the transaction, also indicating the IBS/CBS amounts to be separated from the total amount paid. This information will then be transmitted to financial institutions and to the companies that process payments, which will be responsible for operationalizing this installment through an electronic platform to be made available and managed by the Management Committee in conjunction with the Federal Revenue Service.

The system has been structured in three main formats: (i) the super-intelligent model, in which financial and payment institutions consult the tax authorities and collect only the net portion, already considering the offsetting of taxpayer credits; (ii) the intelligent model, in which payment agents collect taxes in full, without appropriating credits, with any unused balance being refunded to the taxpayer within three business days; and (iii) the simplified model, aimed primarily at non-taxpayers, with withholding at a fixed rate previously defined by the Federal Revenue Service.

This mechanism will be mandatory, including for installment transactions, and will be integrated with the main digital payment methods, such as PIX and cards. Manual processing will be permitted only when automatic processing is not possible, such as for cash or check payments.

Despite its goal of simplifying and combating fraud, taxpayers are already expressing concern about the issue, particularly its impact on cash flow. The impact tends to be more severe for small and medium-sized businesses, which often operate on tight margins and depend on every available resource to maintain their daily operations. As taxes are withheld immediately, the company loses, even temporarily, the resources that previously provided financial relief, which could compromise the liquidity needed to pay expenses and sustain operations.

Another sensitive issue is the technological system’s ability to process the enormous volume of information and transactions in real time. Possible failures could, for example, delay the refund of overpaid amounts, further exacerbating companies’ cash flow difficulties.

Although LC No. 214/2025 establishes general guidelines, several points were addressed superficially and will require more detailed regulatory provisions, such as the split payment mechanism itself.

Given this scenario, companies are advised to conduct simulations to measure potential impacts, closely monitor the enactment of supplementary regulations, and train their teams to mitigate financial and operational risks when the new rules come into effect.