From rules to results: where tax reform begins to affect businesses

The transition to IBS and CBS will affect working capital, pricing, contracts, technology and supplier relationships. For businesses, 2026 is the time to turn these variables into a concrete readiness plan for 2027.

Next year marks a new concrete stage in the transition to Brazil’s new consumption tax system.

According to the official timetable, 2026 serves as a testing year for IBS and CBS. In 2027, PIS and Cofins will cease to exist, CBS will begin to be levied under the new model and IBS will remain in its initial implementation stage. The Selective Tax will also come into force. The transition will continue gradually until 2033.

This means that decisions made throughout 2026 may determine a company’s level of operational readiness in the following year.

There is a relevant difference between formally meeting a regulatory deadline and being operationally prepared for it. Systems need to be developed and validated; contracts need to be reviewed before renegotiation; pricing assumptions need to be tested; critical suppliers need to be assessed; and cash flow impacts require projections before the changes take effect.

For organisations with complex operations, this work can hardly be concentrated in the months immediately preceding 2027.

One of the issues warranting particular financial attention is split payment, a mechanism that links payment for a transaction to the segregation of the corresponding tax amount.

In practice, this model is expected to change the traditional dynamics under which certain tax amounts temporarily pass through a company’s cash flow before subsequently being remitted to the tax authorities.

Official technical documentation indicates that the implementation of split payment is expected to begin in 2027. The fields and structures developed in 2026 are preparatory in nature, allowing tax authorities, issuers of electronic tax documents and other participants to test their adaptations in advance.

From a financial management perspective, the question is straightforward: what will the cash conversion cycle look like when part of these funds is no longer temporarily available to treasury?

The answer will vary depending on the business model. Average collection periods, the profile of tax credits, commercial terms, transaction volumes and financing structures may produce different effects across companies and sectors.

Companies therefore need to test different liquidity scenarios.

The assessment of the tax reform may consider, among other factors, customer collection periods, the timing for the recognition and use of tax credits, the profile of supplier payments, working capital requirements and potential periods of financial mismatch.

This analysis becomes particularly relevant in light of the survey reported by Folha, according to which 78% of the companies surveyed had not yet adequately assessed the impact of the reform on cash flow.

For CFOs and finance teams, the reform therefore needs to be incorporated into treasury planning, rather than being treated solely as part of the tax budget.

Yes. The reform may change assumptions currently used for pricing and profitability assessments.

Changes to the tax credit system, the incidence of taxes and supply-chain dynamics may produce different outcomes depending on the product, service, customer or channel.

The fact that 34% of the executives surveyed still did not know how prices would be affected by 2027 shows that this assessment remains incomplete at a relevant portion of the companies surveyed. Analyses based exclusively on aggregate figures should be avoided.

A company may arrive at an apparently neutral average impact and still identify significant differences across business lines. A particular product may lose margin, while another may become more competitive. One contract may allow a specific change to be passed on, while another may allocate that cost to one of the parties.

The strategic question therefore becomes: where does the reform change the actual economics of the business?

Because tax changes may have a direct impact on pricing, invoicing, the economic balance of contracts, pass-through mechanisms and obligations undertaken by the parties.

Not every contract will have the same degree of exposure. The review should prioritise agreements with greater financial relevance, longer terms or a higher degree of dependence on tax structures currently in force.

Points requiring particular attention include clauses relating to taxes, price formation and adjustments, economic rebalancing, invoicing, responsibility for tax documentation and renegotiation mechanisms.

The legal analysis should be conducted alongside the economic assessment.

The key question is: “who bears the economic impact of the change, and what contractual mechanism allows it to be addressed?” This assessment may reduce future disputes and provide greater predictability in negotiations with customers and suppliers.

Both. Under the tax reform, compliance increasingly depends on systems capable of correctly generating, transmitting and interpreting tax data.

The Brazilian Federal Revenue Service already provides for obligations relating to the issuance of electronic tax documents containing IBS and CBS information during the transition period. Legislation and technical documentation have been updated throughout 2026 to support this implementation.

As a result, ERP systems, tax engines, product and service master data, financial interfaces and integrations are becoming part of the company’s compliance infrastructure.

The survey reported by Folha draws attention precisely to this point: only 1% of respondents considered their technology function ready for the reform.

Companies need to assess whether their processes can operate end to end in the new environment created by the tax reform.

Because a company may be internally prepared and still suffer impacts resulting from failures by third parties.

The fact that 82% of respondents considered their suppliers unprepared indicates that the transition also needs to be assessed from a value-chain perspective.

Issues involving master data, tax document issuance, system configuration or data transmission may affect collections, tax credits, invoicing and business continuity.

It is therefore advisable to identify critical suppliers and business partners and assess the level of preparedness of each of them.

Not all relationships require the same level of monitoring. The focus should be on those that could generate a more significant financial or operational impact if failures occur during the transition.

The tax reform will continue to generate regulatory and technical adjustments throughout its implementation. This is inherent to a transition of this scale.

For businesses, however, waiting for every detail to become settled may reduce the time available to adapt complex processes. The survey data reported by Folha de S.Paulo show that there is still a significant gap between the progress of the reform timetable and the level of preparedness reported by the medium-sized and large companies surveyed.

This gap warrants attention because the effects of the reform do not end with tax calculation and compliance. They may extend to cash flow, margins, systems, contracts, suppliers and commercial decisions.

Preparing for 2027 means connecting these variables before they become operational issues.

At FAS, we approach the tax reform from this integrated perspective: understanding the rules is the starting point. The objective is to translate their effects into more consistent business decisions, with a focus on operations, financial predictability and risk management.