How the Tax Reform of 2025 Will Impact the Cash Flow of Companies?

The Tax Reform of 2025 promises to significantly transform the Brazilian tax system, bringing changes that affect everything from the simplification of taxes to the cash flow of companies. Approved through Constitutional Amendment No. 132 in December 2023, this reform introduces a new taxation model, directly impacting the financial and operational management of companies.

Tax Simplification and Unification of Taxes

One of the main changes is the unification of taxes into a Dual VAT model, replacing taxes such as PIS, Cofins, IPI, ICMS, and ISS with two new taxes: the Tax on Goods and Services (IBS) and the Contribution on Goods and Services (CBS). This simplification promises to reduce bureaucracy and facilitate tax management, but also requires adaptation by companies, especially in the implementation of new systems and tax strategies.

Positive Impact on Cash Flow: Key Points

According to experts, some changes brought about by the reform can benefit companies' cash flow. Here are the main highlights:

1. Credit Time Frame (Art. 28)

   With the reform, tax credits will be available on the date of purchase, without the need to wait for the arrival of goods. This anticipation improves liquidity and reduces financial bottlenecks.

2. Immediate Credit for Electronic Payments (Art. 52)

   Payments made via electronic transfer will guarantee immediate credit or at the payment date, avoiding delays in the recognition of tax credits.

3. Compensation between Establishments (Art. 46)

   The reform allows for the compensation of debtor and creditor balances between different states and establishments, solving problems that could previously take years to resolve.

4. Use of Credits for Importation (Art. 80)

   Companies will be able to use tax credits to pay IBS and CBS on imports, a practice that is currently limited in some states.

5. Split Payment: Divided Payment

   The split payment model modifies the way taxes are collected, being deducted directly at the moment of sale or purchase. Although this may pose an initial challenge to cash flow, the system aims to reduce delinquency and tax evasion, bringing long-term benefits.

Other Relevant Changes

• Taxation at Destination: Aiming to end the fiscal war between states, the reform changes the taxation from origin to destination, ensuring greater fairness in tax collection.

• Differentiated Regimes: Specific sectors, such as education and health, will have reduced rates, while financial services and other strategic sectors will have regimes adapted to their particularities.

• Hybrid Simples Nacional: Companies opting for Simples Nacional will be able to choose between the traditional regime and the segregated taxation for IBS and CBS, depending on what is more economically advantageous.

How to Prepare for the Changes

Companies must invest in a detailed analysis of their fiscal and financial processes to adapt to the new regime. Reviewing pricing, optimizing cash flow, and choosing the most appropriate tax regimes will be crucial to maintaining competitiveness in the market.

The Tax Reform of 2025 not only simplifies taxation but also presents challenges and opportunities. Staying updated on the changes and relying on specialists in tax management will be essential for navigating this new landscape.