Meta’s Tax Changes in Brazil 2026: Impact of CBS, IBS and the Transfer of PIS/COFINS and ISS

Brazil is entering a new tax era, and businesses must prepare for the changes that will take effect on January 1, 2026. Meta — owner of Facebook, Instagram, and other platforms — will adjust its billing practices in Brazil, with two significant updates: the introduction of new value-added taxes (CBS and IBS) and the transfer of PIS/COFINS (9.25%) and ISS (2.9%) to customers.

While CBS and IBS will initially appear on invoices only for testing purposes, with symbolic rates that will not affect advertisers, the transfer of PIS/COFINS and ISS will result in an estimated 12.15% increase in the cost of digital advertising campaigns.

The New VAT Framework and Testing Phase

The tax reform introduces a VAT-like model through CBS (Contribution on Goods and Services) and IBS (Tax on Goods and Services). For now, Meta invoices will show 0.9% CBS and 0.1% IBS, without financial impact. Still, this marks the beginning of a transition to a new system that will reshape pricing, margins, and compliance strategies for businesses.

Passing PIS/COFINS and ISS to Customers

More immediately, Meta will stop absorbing PIS/COFINS (9.25%) and ISS (2.9%), instead charging them directly to Brazilian customers. This change aligns the company with local practices and increases advertising costs by around 12.15%.

For companies under the real profit regime, part of this cost may be offset through tax credits. However, small businesses under Simples Nacional will likely bear the full impact, as they generally cannot claim credits.

Practical Implications for Businesses

This shift has broader consequences. It affects marketing budgets, pricing strategies, and overall competitiveness. The payment model also matters: in postpaid billing, taxes are added on top of the invoice; in prepaid billing, taxes reduce the effective balance available for campaigns.

Companies will need to reassess their financial planning and ensure that marketing ROI remains sustainable under the new taxation structure.

The Role of Preventive Legal Advisory

In this environment, preventive legal advisory becomes a strategic tool. Business lawyers can guide companies in contract adjustments, tax credit management, and governance practices, ensuring compliance and financial efficiency.

Meta’s tax changes are just one example of the broader Brazilian tax reform. For businesses, they represent both a challenge and an opportunity. Proactive legal and financial planning will be essential to adapt effectively and maintain competitiveness.