With Brazil experiencing a tax technology revolution imposed by the Tax Reform, which will replace five current taxes with CBS (Contribution on Goods and Services) and IBS (Tax on Goods and Services), Brazilian software houses, companies developing business management systems (ERPs), face a critical moment of internal and tax restructuring in their platforms until the beginning of 2026, when the changes imposed by the Government begin to be implemented.
Although the changes are expected to take effect from January 2026, more than 95% of these companies are not prepared, according to data from Avalara, a global fintech specializing in tax solutions. The new tax structure will unify tax collection into a simpler system but will require significant adaptations in management and billing systems. This lack of preparation can cause serious problems for companies in various sectors, including niche businesses, which depend on the solutions provided by these software developers, as they will not have access to updated tools compliant with the new requirements.
The lack of adaptation by these technology companies can end up compromising both their businesses as a whole and their clients, companies in specific niches. This is because organizations that are not adapted by the beginning of next year run a high risk of increased costs, loss of competitiveness, and financial management issues, which may result in fines and expose them to possible audits and investigations by the Federal Revenue Service.
“From a technological standpoint, adapting systems in less than a year is nothing. Accounting and tax departments cannot wait for these changes. At Avalara, for example, we have already been working on mapping the new fields that will be implemented and the calculation engine because there is no more time. Those who have not started updating are already far behind,” explains Meire Rustiguer, Tax Manager at Avalara, during the AvaCast, a podcast with guests from the tax sector produced by the company.
To assist software houses facing challenges in the tax and fiscal world, Avalara offers the Avalara Included program, which facilitates cloud integration with access to various functionalities within digital platforms, such as ERPs, e-commerce, billing, CRM, and marketplaces in a customized manner. These integrations allow software houses to efficiently connect tax solutions to their systems, such as document collection and capture for tax calculation, an online calculation engine, and real-time messaging with the TAX AUTHORITY that determines and delivers tax obligations. The system also enables calculating sales taxes with technology and automation, contributing to the correct application of taxes, avoiding errors and fines, and providing more security and peace of mind for niche businesses that use technology companies’ services.
“Our idea is for the Avalara Included program to be a strategic tax support for software houses. In addition to ensuring a complete cloud infrastructure, it is a full compliance circle so that software houses are up to date with new updates, allowing niche businesses to adapt quickly and safely this year without causing losses for their clients,” concludes Luiz Sales, Head of Business Development at Avalara.
