Tax reform 2025: what will change in practice?

The 2025 Tax Reform marks one of the most important moments in the history of the Brazilian tax system. With the approval of the Constitutional Amendment 132/2023 and the sanction of Complementary Law 214/2025The country is embarking on a structural change that will directly affect the way goods and services are taxed in the coming years.

The proposal aims to correct historical distortions, simplify the system, end the cumulative nature of taxes and promote greater transparency. But after all, what changes in practice for companies? How can you prepare for this new tax reality?

The CLM Controller Accounting has prepared this complete content to answer these and other questions that have already begun to arise in the business world.

A new consumption tax model

The basis of the reform is to replace the five consumption taxes currently in force with three new taxesin a more modern and standardized system:

• CBS (Contribution on Goods and Services)It replaces PIS and COFINS. It will be a federal tax with a single, non-cumulative rate.
• IBS (Goods and Services Tax)ICMS: replaces ICMS (state) and ISS (municipal). Collection will be shared between states and municipalities, but with unified management.
• Selective Tax (IS)This is on products that are harmful to health and the environment, such as cigarettes and alcoholic beverages.

The great news is that all these taxes will be non-cumulativeIn other words, companies will be entitled to credit on what they pay in the previous stage of the production chain. This should reduce distortions and make prices fairer and more transparent.

What happens to Simples Nacional?

The micro and small companies opting for Simples Nacional will not be excluded from the new system. The system will continue to exist, but will be adjusted to fit the Dual VAT model (CBS + IBS).

The reform text allows Simples to maintain the unification of taxes in a single DASBut at the same time, it opens up the possibility that part of the tax on consumption will be levied outside Simplesaccording to the company's choice.

As a result, Simples Nacional will now work in two ways:

Collection within Simples

In this model, the company continues to pay taxes on consumption through the DAS, in a simplified way, no use of credits. This tends to be advantageous for:

• Businesses that sell directly to the end consumer;
• Smaller companies that want simplicity and less bureaucracy;
• Self-employed professionals and local service providers.

Separate collection of CBS and IBS

Here, the company remains in Simples for IRPJ, CSLL and Social Security, but chooses to pay CBS and IBS outside the unified regimeand can be credit taxes paid on previous purchases.

This model may be more interesting for companies:

• Who sell to other companies (B2B);
• Inserted in the production or export chain;
• With a more robust accounting structure, able to deal with greater fiscal complexity.

The choice between models will be optionalBut it needs to be done with strategic planning and analysis, as it directly affects the company's competitiveness, cash flow and tax burden.

What will change in the day-to-day running of companies?

Implementing the reform will require major changes in administrative, accounting and tax routine of companies. Below, we highlight the main points of attention:

• Updating ERP and invoice issuing systemsThey will need to adapt to the new fields required by the IBS and CBS.
• Contract review with suppliers and customers, since the new rules affect pricing, the highlighting of taxes and the formation of credit.
• Training for tax and accounting teamsThey will have to deal with new codes, accessory obligations and calculation procedures.
• Strategic tax planningand the impact of the changes on profit margins, the tax system and the use of credits.

Neglecting this adaptation can lead to tax inconsistencies, increased costs and loss of competitiveness.

What about the tax burden?

The final rate of CBS + IBS will still be defined based on estimates of tax collection. The current forecast is around 25% to 27%considering the sum of federal, state and municipal taxes.

But it is important to note that not every company will feel the tax burden increase. With the new system:

• Companies that buy highly taxed inputs will be able to benefit from the wide possibility of credits.
• Companies operating in the intermediate chain (such as industry and wholesale) tend to have reduction in effective load.
• Those who work in retail, on the other hand, sell directly to the end consumer, may feel a greater impactbecause it does not benefit from the credits and passes on the full tax.

Therefore, the real effect of the reform will vary according to the business model and the company's position in the production or marketing chain.

Will there be changes to the basic food basket and essential sectors?

Yes. The new legislation provides for differentiated treatments for sectors considered strategic or essential, as a way of maintaining social and economic balance. Among them:

• National food basket with a zero rate;
• Health, education, public transportation, medical and cultural facilities with a reduced rate;
• Financial services, fuel and electricity with specific calculation systems.

These adjustments seek to avoid negative impacts on the low-income population and guarantee the continuity of essential services.

Reform implementation schedule

The transition to the new system will be made in a manner gradualallowing companies time to adapt:

• 2026: CBS test collection begins, at a symbolic rate;
• 2027: CBS comes into force, replacing PIS and Cofins;
• 2029: IBS is gradually replacing ICMS and ISS;
• 2033: complete extinction of the old taxes and full adoption of the new model.

During this period, companies will be able to experiment with the two models, adjust internal processes and decide on the best way to fit in.

How can accounting help at this time?

The complexity of the transition requires companies to have the support of up-to-date, strategic accounting that thoroughly understands the implications of the reform.

A CLM Controller Accounting is prepared for:

• Analyze the impact of the reform about your business;
• Simulate different scenarios to choose the best collection model;
• Reviewing internal systems and processes to adapt to the new legislation;
• Advising on the best time to migrate for the new regime, based on real data;
• Offer tax and accounting training for your team.

More than complying with legal requirements, our role is to ensure that your company goes through the transition safely, intelligently and with a competitive edge.

Conclusion

A Tax Reform 2025 ushers in a new era for the Brazilian tax system. By unifying taxes and creating a more modern and transparent model, the proposal brings opportunities, but also demands responsibility, organization and strategic vision.

Companies that know plan your adaptationtake advantage of the new tax credits with the right support, they will have a better chance of growing in a more balanced and efficient environment.

If you want to understand how the reform impacts your sector and need support to make the best decisions, talk to the CLM Controller Accounting.

We are ready to lead your company safely into the era of new Brazilian taxation.