The approval of the Tax Reform in the National Congress signals profound changes in the Brazilian tax system, with direct impacts on the technology sector that provides services.
Software companies, startups and digital businesses need to prepare for a new scenario that will require strategic and operational adjustments.
Check out the 3 main impacts:
1. Increased Tax Burden: The unification of current taxes (PIS, Cofins and ISS) into the Tax on Goods and Services (IBS) and the Contribution on Goods and Services (CBS) represents a significant change. Today, the tax burden varies between 5.65% and 8.65% on revenue, but with the reform, taxation will now be levied on the added value, that is, revenue minus permitted costs and expenses, with estimated rates between 26% and 28%.
One of the major challenges for the technology sector is that relevant costs, such as payroll, will not be deducted when calculating tax credits. This could increase the effective tax burden for companies that offer digital services, such as SaaS (Software as a Service) and streaming platforms, resulting in higher operating costs and, possibly, in the passing on of prices to consumers.
2. Adaptation to Taxation at the Destination: Currently, taxation occurs, for the most part, at the place of origin, that is, in the municipality where the service is provided. With the reform, the rule will be changed so that the tax is collected at the destination, that is, in the municipality where the end consumer is located.
This change will require companies to adapt their systems to accurately track the place of consumption, generating the need for investments in technology and processes to report detailed tax information. The new rule increases the complexity of compliance and will bring significant operational challenges.
3. Full Non-Cumulativity: Currently, taxes are calculated by applying the rates directly to the companies’ gross revenue. With the reform, the calculation will now consider the added value, that is, the revenue minus tax credits on the permitted operating costs. To achieve this, it will be essential to parameterize tax systems that can correctly identify and calculate these credits at each stage of the operation.
This change will require much more detailed control of incoming and outgoing transactions, including strict monitoring of invoices and expenses. In addition, it will be necessary to implement systems to guarantee compliance with the new rules and ensure the correct calculation of taxes, avoiding inconsistencies and penalties.
Despite the promise of simplification of the new tax system, the transition, scheduled for 2026, will bring significant challenges. Technology companies must start preparing now to minimize the impacts of this change and ensure their competitiveness in a more complex and dynamic tax scenario. Early adaptation will be essential for companies to adjust to the new requirements and take advantage of opportunities in a constantly evolving regulatory environment.
