The amounts will be small, however, because the new tax system will be in a testing phase. The Tax on Goods and Services (IBS) and the Contribution on Goods and Services (CBS), created by the reform, will not be collected in this first year of operation. They will only be calculated, based on a test rate of 1%, with 0.9% for the CBS and 0.1% for the IBS. “In 2026, it will be a test run,” Neves said. “The game starts in 2027.”

The test will mainly serve to adjust systems at companies and tax administrations. Especially at the beginning of the year, attention will be focused on the information technology involved in the change.

At the same time, companies and consumers will be able to get a sense of how the new tax system will affect them. The reform will make visible what today is largely unknown: how much is paid in taxes that are embedded in the prices of each product and service.

From 2026 through 2033, this portion will gradually be shown separately on invoices. Consumers will see the net price and the taxes clearly. This is not an increase in taxation, as it may appear, but rather a disclosure of the tax burden.

In the view of tax specialists, this is the main change that will be seen in the initial phase of the reform. By knowing how much each party pays in taxes and the volume of credits they will begin to receive, companies will start renegotiating prices and contracts.

Continuing with the soccer comparison, former Federal Revenue auditor and president of the Brazilian Tax Committee (CTB), Adriano Subirá, said the match will be the transformation of relationships between companies. “This is an economic reform with a tax last name,” he said. “The game is the economic reform, which for me will have an impact similar to that of the Real Plan.”

For tax expert Rubens Souza, president of the Tax Reform Study Group (Gert) and a partner at WFaria Advogados, “the period of 2026 has to be used to look at pricing, not only of your own product, but also that of your suppliers, and to renegotiate acquisition prices.”

Over time, prices will come to be expressed by their net value, with taxes separated and generating credits. “There are many costs that used to remain in the chain and will now become credits, which may ultimately reflect a reduction in the tax burden,” Souza said.

Companies need to pay close attention, because the pricing logic will change, said lawyer Daniel Loria, of Loria Advogados, who was director of the Special Secretariat for Tax Reform at the Ministry of Finance.

First, he said, the current consumption tax rate is charged “from the inside,” meaning the tax applies to the taxes that make up the price of the good or service. With the reform, it will be charged “from the outside.” In addition, it is necessary to understand the dynamics of credits. “All the upstream tax cost is recovered and, if your customer is a company, it also recovers all the tax cost. These are two factors that need to be well understood for companies to be able to renegotiate prices in a productive and technical way.”

The focus of company management will shift away from tax planning and toward the economic viability of the business, said Marcos Flores, manager of the Federal Revenue Service’s Consumption Tax Reform Project. “They will recalculate their costs and prices, but 2026 is just the beginning of this, because it is merely the highlighting of a very low rate.”

He offered some practical recommendations for companies for the year. The first is to adapt tax documents so that they already show the IBS and CBS separately. A large share has already completed this step, he said.

Companies should also check whether codes such as the Mercosur Common Nomenclature (NCM), the Brazilian Services Nomenclature (NBS) and the Tax Classification Code (cClasTrib) used to issue invoices are correct. This is important for when taxes begin to be collected, as rates differ depending on the product, the service and the purchaser.

It is already possible to integrate the IBS and CBS calculator into ERP (Enterprise Resource Planning) software, Flores noted. He also warned that as of January 1 all companies will have an electronic tax domicile, through which they will receive communications from the Federal Revenue Service. “The company needs to know that it will no longer receive letters or have someone knocking on the door to deliver them.”

Finally, systems must be adapted to operate with the alphanumeric CNPJ, which comes into effect on July 1. “The company’s CNPJ does not change, but new customers and new suppliers may have an alphanumeric CNPJ,” he said. “For it to be able to buy from and sell to these new companies, it is important that its system is already adapted.”

The testing phase will begin before the regulation of the reform is complete. Congress only approved on December16 Complementary Bill (PLP) 108, which creates the IBS Management Committee, the structure that will administer the new tax resulting from the merger of the Tax on the Circulation of Goods and Services (ICMS) and the Services Tax (ISS). The bill has not yet been sanctioned by President Lula, which is expected to happen in mid-January. Once the legislation is complete, the Federal Revenue Service and the Management Committee will issue regulations for the new taxes.

“From the taxpayers’ point of view, nothing prevents the start of the experimental phase,” Flávio Sérgio Mendes de Oliveira, president of the CGIBS and finance secretary of Mato Grosso do Sul, told Valor regarding the absence of the law. “The CBS and IBS platforms will begin operating in January 2026, exactly as planned.”

Because of the delay, the idea is to be lenient in requiring invoices that show the CBS and IBS separately in this initial phase. In a recent joint act, the Federal Revenue Service and the IBS Management Committee clarified that there will be no penalty for the absence of a declaration until the first day of the fourth month after the publication of the CBS and IBS regulation, which does not yet have a date.

Toward the end of the year, companies’ main concern was being unable to issue invoices showing the IBS and CBS amounts. In some municipalities, there is still debate over whether the ISS will be included in the calculation base of these new taxes.

“We are just days away from the testing period and there is still a lot of uncertainty, especially around the electronic services invoice,” Souza said. “There are municipalities that still have not stated how they will do these calculations, for example whether they will include CBS and IBS in the ISS base.”

“The government has been careful,” Loria said. “Technical notes were issued stating that invoices will not be rejected [if they do not show IBS and CBS separately], which addresses a major concern of companies that feared an economic freeze.” There was concern that suppliers would not be able to issue invoices, preventing them from receiving inputs.

With so many changes happening at the same time, there is concern about misinformation and “fake news.” One risk is that the test rate could be mistaken for an additional tax, Flores acknowledged. That is not true, he said, because for consumers nothing changes in this first year. “Could there be ‘fake news’ along the way? It’s possible, but transparency is better than the current system, in which no one knows how much they pay.”

*By Lu Aiko Otta — Brasília

Source: Valor International

https://valorinternational.globo.com/