The window has closed: recording an IBS and CBS election, or its absence, in a founder's file
The opt-in window for the regular IBS and CBS regime is behind us. For advisers to Brazilian founders who left the country but kept an entity there, the file question is no longer whether to elect — it is what the record shows about the decision that was made, or the one that was never taken. A practical note on evidencing an election, evidencing its absence, and dating both against the transition timetable.
The getax team · 7 min read
The question the file now has to answer
Until this week, the live question was advisory: should this entity opt into the regular regime for IBS and CBS, and on what reasoning. That question is closed. The deadline for exercising the option fell on the Friday announced by the Receita Federal, and the notice is on the record.
What remains is documentary. When the entity files under the new regime, someone will reconstruct the decision — a reviewer inside the firm, a successor adviser, an auditor, or the tax authority itself. They will not reconstruct it from memory. They will reconstruct it from whatever the file holds on the day they open it.
So the work now is to make the file say, plainly and with dates, which of three things happened: the option was exercised, the option was considered and declined, or no decision was taken and a default applied. Those are three different positions. A blank file looks identical in all three cases, which is the problem.
What the official notice does, and does not, say
Start with the source the news item rests on. The Receita Federal notice announces the closing date of the option window and reports on the volume of taxpayers who exercised it. That is what it is for. It is a participation and deadline notice.
It is not the authority for what happens to an entity that stayed silent. The treatment that applies by default when no option was exercised does not live in a press notice; it lives in the statute and the implementing rules for the transition. If your memo cites the notice as the basis for the default treatment, the citation will not hold when someone follows it.
This is the ordinary discipline of a source walk: open the document, read what it actually governs, and note where it stops. The notice establishes the date. The consequence of the date is somewhere else. Say so in the memo rather than letting the gap close quietly.
Evidencing an election that was made
If the option was exercised, the file should let a reader confirm it without logging into anything. At minimum: the acknowledgement or receipt generated at submission, the taxpayer registration it was filed under, the person who authorised the filing and the person who submitted it, and the timestamp the system returned.
Then the scope. An election is made for a legal person, and a founder's structure may involve more than one. Record which entity the election covers and which establishments sit under it. Record whether any related entity was deliberately left out, and why. The entity you did not elect for is part of the position just as much as the one you did.
Finally, the reasoning as it stood at the time. Not a reconstruction written after the first filing, but the note that existed before the deadline: the expected effect on credits, the counterparty profile, the activity mix. Reasoning dated after the fact reads as justification. Reasoning dated before the fact reads as a decision.
Evidencing an election that was not made
Absence is information, but only if the file records it as a decision rather than leaving it as a hole. Where the entity chose not to opt in, the file should carry a short note, dated before the closing date, naming who decided, what was weighed, and what default treatment was understood to follow.
Where no decision was taken — because the entity was dormant, because the founder's relocation moved the engagement's centre of gravity, because nobody raised it — say that too, and date the moment it was noticed. An honest note that the window passed without a decision is a defensible record. Silence that is later described as a strategy is not.
The distinction matters most in exactly this population: a founder abroad, an entity still registered in Brazil, correspondence running through a jurisdiction where nobody opens Brazilian portal notifications. That is a structure in which a deadline can pass without anyone deciding anything. The file should be able to show whether that is what happened.
Dating everything against the transition timetable
The regime is phasing in, and that means the answer to a question changes depending on the period it is asked about. A memo without a date is not evidence; it is an opinion of unknown vintage.
Stamp each item in the file with the date on which it was true, not only the date it was written. The source text you relied on should carry the version and the date you read it. If a rule you cited has since been amended, the dated citation is what makes the earlier position reviewable rather than simply wrong.
Then line the dated items up against the transition calendar and look for ordering problems. A decision memo dated after the closing date. A board resolution signed after the submission receipt. A residency exit filing that postdates a decision made on the assumption the founder was still resident. Ordering problems are the cheapest defect to find now and the most expensive to explain later.
Where the election sits in a founder's wider chain
For a relocated founder, the IBS and CBS election is one link in a chain, and the chain is what gets examined. Residency status in Brazil and in the new country of residence. The entity's own regime and its registrations. Whether management is exercised from abroad, and what that does under domestic rules and under any applicable treaty. Remuneration flows out of the entity.
Keep the chain in one place. The common failure is not a wrong conclusion on any single link; it is a correct conclusion on each link reached at a different time, under a different set of assumptions, and never reconciled. The election was evaluated as though the founder were still resident. The residency position was evaluated as though the entity's regime were settled.
The reconciliation step is short, and it is a human one: read the links in sequence and ask whether each was decided on facts that were true at the time of the next one. The professional decides and signs. The point of the file is to make that signature reviewable.
The Floor: our numbers, with their dates
We publish the high number next to the low one, dated, every quarter, including the quarters where the number is bad. Here are the figures we publish: From 24% to 98%. 4,790+ (as of September 2026). 870+ (as of September 2026).
Now the gap, which is the part that matters for this post. None of those figures is a statement about the IBS and CBS election. They describe our own work and the dates on which it was measured. We are not going to stretch them to cover the subject of a post they were never measured against.
If you want to know how we perform on a Brazilian transition question specifically, the honest answer today is that we have not published a dated figure for it, and you should treat its absence the same way we are asking you to treat an absent election in a client file: as information, not as a reassurance.
What to do before the next filing
Pull the files for every Brazilian entity on your relocated-founder list and sort them into the three states: elected, considered and declined, no decision taken. Note which state each file can actually evidence, as opposed to which state you believe it is in.
For the files that cannot evidence their state, write the dated note now, describing what is known and what is not. A note written today that says what was known today is worth more than a confident reconstruction written next quarter.
Then, at the next review with the client, open a handful of the key numbers and show where each one lives in the law. Not a summary of the law — the text itself, with its date. That is the habit we try to leave behind at every delivery, and it is the one that makes a position defensible when someone else is reading the file.