Checklist: What Your Company Must Do Before Split Payment Takes Effect
A practical 6-step list to help companies prepare for the tax reform's split payment. Build tax compliance before it comes into force.
Executive Summary
Split payment is the mechanism set out in LC 214/2025 that, at the moment the transaction is financially settled, separates the portion corresponding to CBS and IBS and routes it directly to collection, while the net amount goes to the seller. For the buyer, the tax credit is recognized immediately. For the company, the impact is not only fiscal: it changes the ERP, cash flow, contracts and the financial routine. This checklist brings together six preparation fronts your company should open now, before it comes into force, so you are not caught by surprise.
1. Audit the ERP system
The first step is to confirm that the company’s management system can identify, at the time of issuance and settlement, which portion of the transaction value corresponds to CBS and IBS, which portion goes to the seller and which goes to collection via split payment.
- Request a formal impact analysis from the ERP vendor: does the system already include the new fields on the electronic invoice and auxiliary document required by LC 214/2025 for CBS, IBS and Selective Tax?
- Verify whether the tax module can already generate the separate bookkeeping and the credit statement planned for the new regime.
- Confirm with the vendor the formal delivery date of the update that complies with split payment rules, in line with the testing schedule of the Receita Federal (federal tax authority) and the IBS Steering Committee.
Why it is urgent: the 2026 testing phase already requires CBS and IBS to be calculated for informational purposes, with a direct impact on the validation of electronic tax documents. Anyone who reaches the start of actual collection with an outdated ERP runs a real risk of invoice rejection and credit loss.
2. Train the finance team
The finance area needs to understand the split payment flow end to end, or it will make mistakes in bank reconciliation and cash management.
- Provide internal training on how the transaction value is split at settlement: part goes to the supplier, part goes to collection and, on the other side, the buyer recognizes the CBS and IBS credit immediately.
- Map the accounting accounts that will receive the withholding and tax-credit entries, with support from the responsible accountant.
- Define clear internal procedures to identify which transactions are subject to split payment and which remain outside the mechanism, according to the supplier’s regime.
Practical example: a technology company that contracts ongoing software development services from a supplier opting for the Simples Nacional (simplified tax regime) must assess case by case the regime chosen by the provider (with or without CBS/IBS outside the Simples). It is this choice by the supplier that determines whether the credit comes in full or whether it is restricted by collection via DAS. The finance team must know how to identify and record this right when the supplier is registered.
3. Review contracts with suppliers
Old contracts tend to be silent on who bears the burden of a change in tax regime. In the new scenario, this becomes a guaranteed source of dispute.
- Include a tax pass-through clause that clearly describes how the separation of the CBS and IBS amount will be handled in the context of split payment and who absorbs any differences.
- Ensure that contracts with critical suppliers (main inputs and ongoing services) expressly provide for the possibility of economic-financial rebalancing in the event of changes to the rates tested in 2026 and 2027 or a change in the regime applicable to the transaction.
- Review penalty, suspension and termination clauses to account for scenarios of default or operational failure in the split payment flow.
Contract review is the front that takes the longest and the one that protects the company the most. Starting early is what avoids renegotiations under pressure after the switch.
4. Update payment terms
The deadlines and commercial conditions negotiated today were designed for a world in which the full transaction value reaches the seller. With split payment, part of that value no longer passes through the supplier’s account.
- Map which suppliers will be impacted by split payment and recalculate the financial cost of each term in use, considering that the tax portion no longer finances the seller’s working capital.
- Adjust commercial conditions (early-payment discounts, installments, embedded interest) taking into account that the CBS and IBS portion is no longer available to the seller during the payment term.
- Review working-capital clauses and financial commitments with banks to confirm that the internal payment policy remains compatible with the new cash-flow design.
5. Map accounting accounts for the new regime’s entries
Split payment creates specific accounting entries that must be provided for in the chart of accounts before the first tax document is issued under the new regime.
- Coordinate with the accountant the creation of specific accounts and cost centers to record the recognized CBS and IBS credit, the amount collected via split payment and any accumulated credit balances.
- Ensure that the bank reconciliation system automatically recognizes the amounts corresponding to the tax separated at settlement, without mixing them with the net amount paid to the supplier.
- Prepare a monthly closing report that reconciles the amounts recognized as credit, the amounts collected by split payment and the credit statement generated by the tax system.
Practical example: a mid-sized manufacturer that buys raw material from a supplier under the regular regime must post, with each payment, the corresponding CBS and IBS amount in a specific tax-credit account. That account must be mapped before the first payment under the new regime — there is no improvising after the switch.
6. Review the cash-flow model
With the automatic separation of the tax portion at settlement, the design of the company’s cash flow moves to a new level.
- Simulate cash-impact scenarios considering that the CBS and IBS portion no longer passes through the company’s account, even in months when there is a credit balance to recognize.
- Reassess bank credit limits and working-capital lines, since the actual cash outflow per transaction becomes more fragmented and more predictable.
- Update financial projections to incorporate the variation of the rates tested in 2026 and 2027 and the schedule for the full replacement of PIS, Cofins, ICMS and ISS by 2033.
Next Steps
This checklist does not exhaust the preparation work — it is the starting point. The complexity of the transition requires in-depth planning, especially for companies with extensive supply chains, operations in several states or significant exports.
Want to understand how the tax reform affects your company’s payment management? On /naprática VMAHUB publishes practical guides for business owners. For a personalized analysis of your case, talk to our compliance team: [email protected].
See also:
- Split Payment: what it is and how it works
- Calculating split payment and cash flow
- Tax reform timeline 2026-2033
- Tax reform glossary
Sources: Federal Constitution, as amended by Constitutional Amendment 132/2023; Complementary Law 214/2025; guidance materials from the Receita Federal do Brasil on CBS, IBS and split payment.
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