The Tax Reform is on the agenda in Brazil, bringing significant changes that will affect various sectors, including e-commerce. Companies in this market will need to reassess, primarily, cash flow, product purchase and sale prices, and the supply chain.
Felipe Beraldi, economist and Manager of Indicators and Economic Studies at Omie, a cloud-based management platform (ERP), explains that the Reform is one of the deepest structural changes in the Brazilian economy in recent decades, considering the impact on businesses of all sizes. As a result, the coming years should be marked by a significant improvement in management within companies. The economist lists below everything an e-commerce professional needs to know regarding the new rules.
1 – Unification of taxes The package of measures to regulate the Tax Reform is under discussion in the Legislature, with the main proposal to unify five taxes — ICMS, ISS, IPI, PIS, and Cofins — into two: CBS (federal) and IBS (state/municipal), in addition to the Selective Tax for a specific list of products. This change will result in the creation of VAT (Value-Added Tax), simplifying tax collection and making the process more transparent.
“By reflecting the tax burden on the stages of the production chain in a more transparent way, e-commerce companies gain greater clarity in defining their pricing policy. It is necessary to pay attention to the changes that the Reform will introduce to the market, whether the redistribution of the tax burden among sectors or the broader tax credit mechanism in production chains,” explains the economist.
2- Impact on purchase and sale pricesThe practice of crediting and debiting on a certain tax was, until then, more common in ICMS (Tax on Circulation of Goods and Services). With tax reform, crediting will be expanded to consumption as a whole.
To adjust to the new tax burden, a thorough analysis of the pricing policy will be necessary. Leaving the adjustment of online product values all at once may require significant increases. “A sudden change affects the relationship with customers and suppliers, who may choose not to buy anymore, which influences the viability and growth of the business,” comments Beraldi.
3 – Impact on cash flowThe economist points out that, with legislative changes, online businesses will need to deal more with data and understand better financial elements of the business. “Lack of preparation can generate an inadequate structuring of the financial flow and basic business indicators, including the risk of overpaying or underpaying taxes, which can trigger tax audits and investigations by the IRS,” he concludes.
4 – Gradual transitionTax Reform is expected to have positive effects on the country’s potential GDP in the medium and long term. More growth also means more business opportunities, which will come with complex challenges. Beraldi emphasizes that the implementation of the IBS will be gradual, with a transition period of up to eight years. During this period, the old taxes will coexist with the new system, requiring adaptation and planning from companies. “It is essential that e-commerce professionals be prepared for this transition, adjusting their systems and processes to ensure compliance with the new rules,” he recommends.
5 – Supplier Chain AssessmentGood tax planning will become an essential element for survival – will involve a thorough assessment by the entrepreneur, aiming to maintain competitiveness in the market without compromising their margins.
“At this moment, e-commerce leaders must pay attention to the evolution of regulations and the potential specific impacts on their segment, organize the financial information of their business, and especially approach the accountant – a professional who will have a very strategic role for companies in this context,” highlights the economist.
