A holistic approach to risk management to unlock value

VAT Reform

VAT Reform

PwC Brasil’s approach to the VAT Reform

PwC Brasil positions itself as a strategic partner for corporations navigating the complexities and opportunities of Brazil’s VAT Reform. Guided by a holistic risk management framework, we leverage cutting-edge technologies and predictive analytics to enable businesses to understand the real impacts of the reform. Our insights allow them to refine their strategies both efficiently and securely.

Our integrated approach covers various business areas, from operational restructuring to adapting processes and systems. We offer ongoing support so our clients can confidently navigate the new Brazilian tax scenario, using the reform as a powerful lever to generate value and competitive advantage.

With our expertise, we structure a journey based on five pillars and four primary channels of transformation — data, technology, processes, and people. This strategic framework prepares companies to proactively and effectively undergo significant changes in their business models and financial operations in the coming years. By doing so, they can adeptly navigate the challenges posed by the VAT Reform, ensuring sustainable and lasting outcomes.

Transformation journey

In the next few years, multiple business sectors will undergo significant changes influenced by disruptive technologies, each requiring case-specific evaluations:

The VAT Reform proposes to replace four taxes currently levied on consumption — PIS, Cofins, ICMS, and ISS — and to reduce the scope of IPI. In their place, the Contribution on Goods and Services (CBS), the Tax on Goods and Services (IBS), and the Selective Tax (IS) will be introduced. This reform aims to simplify and rationalize the tax system, contributing to a more competitive and efficient business environment.

Our approach

Business impact: what should be the focus of companies at this time?

The impact of the new tax system will differ across business segments and vary depending on the position of each link in a company’s production chain. This requires strategic and operational adjustments that consider a range of factors, including:

  • Gradual loss of fiscal incentives versus logistical and operational efficiency gains resulting from the relocation of operations.
  • Prospects for changes in sales prices, considering demand elasticity, or changes in supply costs, considering impacts on margins of suppliers or customers in B2B chains.
  • Reduction of investment (working capital) in multilocalized inventories.
  • Reduction of costs and flows of cargo transport.
  • Gains in synergy resulting from integrating operations and reducing legal entities within the same economic group.

Tax Reform Explorer: optimizing your fiscal journey in the VAT Reform

The Tax Reform Explorer is an innovative technological solution designed by PwC to analyze, measure, and simulate the fiscal impacts of the reform. It represents a key component of our comprehensive risk management approach, developed through a dynamic co-creation process with company managers and grounded in business operations’ actual data and reality.

Main features

Comparison/Mapping of “As Is” and “To Be” scenarios: The Tax Reform Explorer goes beyond simply calculating the primary and general impacts of the VAT Reform on business operations. It categorizes concrete fiscal data from these operations comprehensively and rationally. From this foundation, it simulates a range of scenarios, from basic comparisons between the current and projected tax burdens through the complex transition between two consumption tax systems to exploring the outcomes of strategic decisions and their potential future impacts on the business.

Flexibility and adaptation:

  • The solution is adaptable, tailored to fit a variety of circumstances, and recognizes the Reform as a disruptive factor in an ever-evolving business landscape, whether due to ongoing changes in regulations or as a result of personalized, finely crafted interactions with the reality of the company through co-created scenarios and analysis with its managers. 

Our holistic approach to risk management, which converts risks into opportunities, is bolstered by integrated technology and predictive data analysis, including our exclusive generative AI, ChatPwC*.

*Usage is subject to specific data availability policies/rules. 

 

Tax Intelligence: from complexity to execution

Tax Intelligence is a PwC Brasil newsletter covering the latest legislative and judicial developments. It contains in-depth analyses with a pragmatic approach to topics impacting the tax, financial, and economic environments.

Throughout the approval process of EC No. 132 and after it, we have produced various Tax Intelligence issues designed to track the latest updates and analyses on the VAT Reform and related content, providing knowledge and insights for our clients in the form of Takeaways.

Thinking about Taxes

 

Regional Connected Tax Conference

The Regional Connected Tax Conference is an event hosted by PwC Brazil that annually brings together local and international experts to explore key topics such as Transfer Pricing, Pillar 2, and VAT/Tax Reform on consumption. The conference offers a series of discussions on how businesses can prepare for the challenges arising from major changes in both the local and global tax landscapes.You can find out more about the 2025 edition in the section beside.


Our content on the VAT Reform


PwC Debate | VAT Reform approved

Watch our webcast on the impacts of the VAT Reform approval on your company and the Brazilian economy.


New Perspectives | Reasoning on aspects of VAT Reform

Follow our webcast on the challenges, opportunities and other aspects of VAT Reform.

Contact us

Durval  Portela

Durval Portela

Tax leader and partner, PwC Brasil

Mariana Carneiro

Mariana Carneiro

Partner, PwC Brasil

Mayra Theis

Mayra Theis

Partner, PwC Brasil

Eduardo Machado

Eduardo Machado

Partner, PwC Brasil

Hadler Martines

Hadler Martines

Partner, PwC Brasil

Kleber Romano

Kleber Romano

Partner, PwC Brasil

Lucas Oliveira

Lucas Oliveira

Partner, PwC Brasil

Carlos Pedral

Carlos Pedral

Partner, PwC Brasil

Dante Stopiglia

Dante Stopiglia

Partner, PwC Brasil

Marcelo Vieira

Marcelo Vieira

Partner, PwC Brasil

Romero Tavares

Romero Tavares

Partner, PwC Brasil

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