Brazil tax reform creates IT and operational challenges for large companies

A survey by ROIT reveals significant operational challenges for large Brazilian companies as they prepare for the national tax reform. Only 1% of large enterprises consider their IT infrastructure fully prepared to manage the upcoming period of dual tax regimes. Approximately 40% of companies are currently in the planning phase, while 27% report being unprepared or have not yet addressed the issue.

The study highlights a supply chain vulnerability, with 82% of executives stating that their main suppliers are poorly prepared for the requirements of the Goods and Services Tax (IBS) and the Contribution on Goods and Services (CBS). This lack of alignment is expected to impact profitability, with 30% of companies forecasting a direct drop in profit margins and 46% projecting cost pass-throughs to consumers.

In the hospitality sector, the transition is creating uncertainty for long-term commercial strategies and 2027 budgeting. Because definitive tax rates for the new dual VAT model have not yet been fixed, hotels face risks in negotiating corporate contracts. While the hospitality industry may receive a 40% reduction in IBS and CBS rates, the net tax burden could still rise depending on cost structures and credit utilization capabilities.