Brazilian Micro and Small Businesses Face Crucial Tax Regime Choice Deadline

October 30, 2026, marks a pivotal deadline for Brazil's micro and small businesses as they decide between simplified and regular tax regimes under the new 2027 tax system. Businesses must choose whether to collect the Imposto sobre Bens e Serviços (IBS) and the Contribuição sobre Bens e Serviços (CBS) under the regular (hybrid) regime or continue under the simplified (pure) regime unified by Simples Nacional. Over 1 million contributors have already opted for the regular regime as of October 29, 2026, according to Receita Federal, with 299,921 new Simples Nacional entries approved and 357,828 denied.

The regular regime allows companies to collect IBS and CBS separately from Simples Nacional’s tax payment guide (DAS), enabling full transfer of tax credits within the production chain—an advantage highlighted by Décio Lima, president of Sebrae. Meanwhile, the simplified regime consolidates all taxes under Simples Nacional but restricts credit transfer.

Businesses that fail to decide by the deadline will default to the simplified regime with a tax rate varying by business type and size. October 30 is also the cutoff for companies to resolve issues affecting their Simples Nacional enrollment.

For those uncertain, a safe window to change tax choices opens from November 3 to December 20, 2026, with a further opportunity from March 1 to 31, 2027, for mid-year adjustments. The mandatory use of the NFS-e Nacional tax invoice system begins November 1, 2026, with full implementation of the new tax rules starting January 1, 2027.

These changes and deadlines aim to provide better predictability and planning for businesses, especially those with annual revenues up to R$4.8 million, the cutoff for Simples Nacional eligibility. Entrepreneurs are encouraged to use tools like Sebrae’s tax regime simulator to optimize their choices and ensure compliance as Brazil's tax landscape evolves.