The Tax Reform established a new method for extinguishing tax liabilities and, along with it, the need for planning.
By Larissa Moreira.
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Legale Overseas, no. 936.
Split payment is one of the five modalities for extinguishing tax debts established by the tax reform, which began to be regulated on January 16, 2025, with the publication of Complementary Law No. 214. This mechanism aims to automatically separate the amount of taxes — IBS (Tax on Goods and Services) and CBS (Contribution on Goods and Services) — from the total transaction value at the time of the operation, while also helping to prevent tax evasion, delinquency, and fraud.
This new collection method has raised several questions among companies, especially regarding potential impacts on cash flow and the timing of when credits will actually be generated.
Split payment applies only to transactions settled through electronic means (banks or payment intermediaries), thus excluding non-electronic transactions such as cash payments, barter, or loan agreements. It also does not apply to transactions involving exemption, zero rate, deferral, or suspension, as no tax payment occurs in these cases.
It is important to highlight that split payment is not the only form of tax debt settlement. Article 27 of Complementary Law No. 214 of 2025 outlines five ways to extinguish tax debts, namely:
(i) offsetting debts with credits;
(ii) payment by the taxpayer (outstanding balance);
(iii) payment upon financial settlement (split payment);
(iv) payment by the purchaser (via a separate payment guide when electronic payment is not made or in case of habitual defaulter); and
(v) payment by third parties (tax responsible party).
How does split payment work in practice?
The supplying company will issue an electronic invoice containing an identification key linked to the payment method (boleto, Pix, promissory note, credit card, etc.). Using this information, the institution receiving the electronic invoice will segregate the taxes on the transaction, depositing the net amounts of goods or services into the supplier’s account and the amounts corresponding to IBS and CBS to the Management Committee and the Federal Revenue Service. However, before segregation, the intermediary institution will check the credit status through what is called the “super intelligent split” or “intelligent split.”
If it is verified that the tax has already been paid by another debt extinguishing modality, split payment will not be applied. If the tax has been partially paid, i.e., there is still a credit balance, split payment will be applied only on the unpaid portion. Finally, if the tax has not yet been paid, the split payment mechanism will be fully applied.
How will credits be generated?
Credits will be generated based on the tax assessment period. Over the course of a month, credits paid through the various debt extinguishing modalities are incorporated into the assessment, while debts are generated with the issuance of the electronic tax document. This information is forwarded to the platform of the Management Committee and the Federal Revenue Service to automatically assess IBS and CBS. Thus, when the supplier settles the outstanding balance within the assessment period, they enable all credits not yet offset to be appropriated as credit in the fiscal account of the purchasers.
In summary, if the tax document has been issued, accepted, and transmitted to the Management Committee platform and the debt is offset, it will be immediately utilized. However, if this debt was paid, for example, outside the assessment period but before the debt’s due date and enabled through payment of the supplier’s outstanding balance, it will also be immediately enabled.
What about purchases with installment payments?
As soon as the supplier receives the first installment of a payment, they must verify in the Management Committee and Federal Revenue system whether the debts related to that invoice have already been paid through any of the modalities provided for in Article 27 of Complementary Law No. 214 of 2025.
Therefore, credit appropriation on each installment payment will only occur if the tax has not already been paid. However, if the company wishes to recognize the credit earlier, it may pay the outstanding balance.
Understanding this mechanism is essential for companies to financially organize themselves in light of the new fiscal reality. The professionals at Vaz de Almeida Advogados have extensive expertise in tax matters and are available to guide organizations through this new scenario introduced by the Reform.
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