An analysis of the main compliance challenges and recommendations for the sector.

Decree No. 12,955, of April 29, 2026, which regulates the Social Contribution on Goods and Services (“CBS”), Resolution CGIBS No. 6, of April 30, 2026, which regulates the Tax on Goods and Services (“IBS”), and Joint Ordinance MF/CGIBS No. 7/2026, which formalizes the recognition of the common provisions applicable to CBS and IBS, were published. These regulations govern the specific tax regime for operations involving the supply of food and non-alcoholic beverages prepared on the premises.

Although the legislative intent is favorable to the bar and restaurant sector, with a reduction of 40% in the applicable rates, as provided for in article 275 of LC 214/25 (*1) (Law that instituted the Tax Reform on Consumption), the regulation created several points of legal fragility and practical difficulties that demand immediate attention from operators in the sector.

Below are some concerns regarding the regulations published through Decree 12,955/26, which are expected to impact the operations of bars and restaurants, as well as points of attention to avoid generating tax liabilities with the new taxation system:

The vague criterion of "Preparation and Handling on-site"“

Article 396 (*2) of Decree 12.955/26 conditions the specific regime to operations of supplying food and non-alcoholic beverages “prepared and handled on the premises of the establishment”. The law, however, does not clearly define what constitutes “preparation” or “handling”.

This interpretative void creates situations of high legal uncertainty. A bakery that bakes French bread produced on-site falls under the specific regime, but a restaurant that buys the same ready-made French bread from a third-party supplier does not.

The law doesn't answer: what is the minimum degree of transformation required? Does a ready-made dough that is merely baked qualify as "preparation"? Does coffee that is merely ground and filtered represent sufficient "manipulation"?

Impact: This ambiguity violates the principle of tax equality and encourages artificial vertical integration. Small businesses may be pressured to internalize preparation processes simply to qualify for a reduced tax rate, thus increasing operational costs.

Tax Document: Mandatory Segregation

Article 398(*3) of Decree 12.955/26 requires that the tax document segregate the amounts subject to the specific regime from those subject to the general regime. Furthermore, the sole paragraph establishes a severe penalty: in the absence of segregation, the total value of the transaction is subject to the general regime (full rate).

In practice, many bar and restaurant operations involve multiple components. A lunchbox might contain homemade rice, pre-packaged beans, prepared protein, and purchased vegetables. A drink might combine natural juice with pre-packaged toppings. A sandwich might use bread purchased from a third party with meats prepared on-site.

The law requires segregation of these components, but does not provide a clear criterion for how to quantify them. What is the percentage of each component? Should it be calculated by weight, by cost, by value? Establishments with multiple items will have extreme difficulty in segregating accurately. Not to mention the operational difficulty that this analysis would demand.

Impact: Many establishments, out of prudence, will choose to classify entire operations under the general regime, even when only partially qualified. This negates the benefit of the 40% reduction for mixed operations. The electronic invoicing system needs to be adapted to support robust segregation, requiring investment in digital compliance.

Tip Limits and Penalties for Fine Dining Establishments

Article 399, paragraph 1, item I4, allows the exclusion of tips from the IBS/CBS tax base, but only up to a limit of 15% of the total value of the supply. Tips exceeding this percentage are fully included in the taxable base.

Fine dining restaurants, nightclubs, and establishments in tourist areas often receive tips ranging from 18% to 25%. Hotels, upscale bars, and international restaurants naturally have tips above 15%.

Impact: The reduced tax rate regime benefits establishments with higher added value less, as they charge higher prices and receive proportionally larger tips. This represents tax regressivity and penalizes segments that already face higher operating costs.

Segregation of Values in Digital Intermediation

Article 399(*4), paragraph 1, item II, excludes from the tax base “values not passed on to bars and restaurants for delivery and order intermediation services”. However, the law does not hold the platforms (Uber Eats, Ifood, Loggi) responsible for segregating these values on the invoice.

In practice, delivery platforms charge fees ranging from 15% to 30% of the order value. If the platform does not separate this fee on the invoice, how can the restaurant prove whether or not the amounts were passed on? The law transfers responsibility to the restaurant without offering a mechanism for verification.

Impact: Predictable disputes between restaurants and tax authorities regarding how much each platform passed on. Platforms have little incentive to segregate (as this reduces the customer's tax base). Restaurants may be penalized for claiming exclusions without presenting adequate documentation.

Prohibition of Appropriation of Credits

Article 4015 expressly prohibits the appropriation of IBS/CBS credits by purchasers of food and beverages subject to the specific regime. This means that a company that hires catering services, or a hotel that maintains an in-house restaurant, cannot claim tax credits on these transactions.

This restriction materially reduces the apparent benefit of the reduced tax rate. If there is no credit utilization, the “40% reduction” applies only to the cost of the operation, not to the tax credit.

Impact: It reduces the relative competitiveness of outsourced catering operations compared to in-house operations. Companies may be incentivized to internalize kitchens instead of contracting out catering services.

Conclusion

Therefore, the IBS and CBS regulations for bars and restaurants, while bringing about a nominal reduction in tax rates, present significant weaknesses that will create compliance difficulties and audit risks. The eligibility criteria (especially "on-site preparation"), segregation obligations, restrictions on manufactured beverages, and the prohibition of credits reduce the apparent benefit.

The sector must be proactive in seeking clarity from the tax authorities, implement robust document compliance systems, and be prepared to defend its positions in any potential tax audits. Regulation requires ongoing legal attention until consensus is reached.

Article prepared by Mazzucco & Mello Law Firm under legal supervision of National Restaurant Association (ANR).

*1 Art. 275. The IBS and CBS rates relating to the transactions covered by this Chapter are reduced by 40% (forty percent).

*2 Art. 396. The following operations are subject to a specific CBS tax regime, in accordance with the provisions of this Section: (Art. 273, of Complementary Law No. 214, of January 16, 2025):

• I – bars and restaurants, including snack bars;
• II – pastry shops;
• III – bakeries;
• IV – tea houses;
• V – juice bars;
• VI – shops selling sweets and savory snacks;
• VII – cafeterias;
• VIII – ice cream parlors; and
• IX – establishments similar to those referred to in items I to VIII.
• Sole paragraph. The treatment referred to in the main clause does not apply to industrially manufactured non-alcoholic beverages, even if prepared or handled together with other beverages within the establishment.

*3 Art. 398. The tax document relating to the supply must be completed with segregation of the values subject to the specific regime from the operations subject to the general regime, in order to enable the identification of the correct tax classification. Sole paragraph. In the absence of the segregation referred to in the main clause, the total value of the operation will be subject to the general CBS regime.

*4 Art. 399. The basis for calculating the CBS, for the purposes of this Section, is the value of the food and beverage supply transaction subject to the specific regime referred to in art. 396. (Art. 274 of Complementary Law No. 214, of January 16, 2025)

First, the following are excluded from the calculation base:[…]

2. For the purposes of excluding the tax base referred to in paragraph 1, the tip and the intermediation fees must be separated in the tax document corresponding to the supply.

*5 Art. 401. The appropriation of CBS credits by purchasers of food and beverages whose supplies are subject to the specific regime referred to in art. 396 is prohibited (Art. 276 of Complementary Law No. 214, of January 16, 2025).