Tax Reform: What Changes for Companies and How to Prepare - Squad Contábil

Tax Reform: What Changes for Companies and How to Prepare

Tax Reform: What Changes for Companies and How to Prepare

WhatsApp
Facebook
LinkedIn
X

The Brazilian Tax Reform is one of the most relevant topics for business owners and accounting professionals in 2024 and 2025. After years of debate, Brazil is beginning to implement structural changes to its tax system, aiming at simplification, greater transparency, and a more balanced tax burden across economic sectors.

But what does this mean in practice for your business? Which taxes will no longer exist? What will replace them? And how can you start preparing now?

Below, we highlight the key points of the reform and their implications.

⚖️ Tax Unification: End of PIS, Cofins, IPI, ICMS, and ISS

One of the core pillars of the reform is the replacement of five existing taxes (PIS, Cofins, IPI, ICMS, and ISS) with two new ones:

  • CBS (Contribuição sobre Bens e Serviços) – a federal contribution;
  • IBS (Imposto sobre Bens e Serviços) – a state and municipal tax.

Both will operate similarly to a VAT (Value-Added Tax), widely adopted in other countries. The goal is to simplify the system and ensure that tax is levied uniformly throughout the production chain, with credit rights at each stage.

📊 When Do These Changes Take Effect?

The transition will be gradual, starting in 2026, but with a test phase beginning in 2025:

  • In 2025, companies must assess their internal processes and adapt their tax systems, including invoicing systems, to prepare for the test phase;
  • In 2026, CBS and IBS will be implemented in a testing format, with symbolic rates of 0.1% and 0.9%, respectively (totaling 1%, which will be offset against existing taxes);
  • Between 2027 and 2032, the old taxes will be gradually phased out;
  • From 2033 onward, the new tax system will be fully in place.

This transition period requires careful planning, as overlapping rules will coexist for several years.

🏷️ Rates: What Is Known So Far?

Although the exact rates are not yet defined, current estimates suggest that the combined rate for CBS and IBS will be around 25%. The final rates will be determined by supplementary law, with the aim of maintaining a neutral tax burden.

Some sectors — such as healthcare, education, public transportation, and basic food items — are expected to benefit from reduced rates or specific regimes.

🔄 Sector-Specific Impacts

Simplification of tax collection does not mean everyone will pay less. In fact, the reform will benefit sectors with long supply chains and formal operations but may increase the burden on industries with fewer production stages, high informality, or previous sector-specific benefits.

Therefore, each company must analyze its operations individually. The impact of the reform will not be uniform — while some businesses may benefit from simplification and increased credit opportunities, others could face higher tax burdens if they currently operate under special regimes or tax incentives.

📌 Other Key Points of the Reform

In addition to the creation of CBS and IBS, the reform also includes:

  • Tax cashback for low-income families;
  • Creation of a Selective Tax, which will apply to goods considered harmful to health or the environment (such as alcoholic beverages, cigarettes, and pesticides);
  • Standardization of rules across states and municipalities to reduce the complexity of ancillary obligations.

These points require special attention, as they involve changes that go beyond the taxes themselves. For instance, the Selective Tax could impact sectors like beverages, cosmetics, and fuels. Meanwhile, the cashback mechanism seeks to promote greater social equity but will also require adjustments in point-of-sale systems.

📈 How Should Your Company Prepare?

The Tax Reform fundamentally changes how taxes are calculated, paid, and managed. Therefore, we recommend that businesses:

  • Map fiscal and operational impacts based on the new model;
  • Review contracts that include tax-related clauses;
  • Update systems and ERPs to align with the new tax reporting and calculation logic;
  • Train accounting and tax teams, especially for the transition years.

A good starting point is to run a comparative simulation between the current system and the future one. This helps anticipate risks, adjust pricing strategies, and even reevaluate your company’s market approach. Companies that prepare now will have a competitive advantage when the new rules take effect.

✅ Count on Our Team to Understand and Implement the Changes

The Tax Reform represents one of the most significant overhauls of Brazil’s fiscal system in recent decades. With it come challenges — but also opportunities, especially for companies that plan ahead and stay organized.

Our firm is closely following every step of the regulatory process and can help your business interpret the changes, adapt processes, and avoid tax risks. If you want to better position your company in this new environment, talk to us.

Category