With the tax reform regulated this year and that will begin in force in 2026, Brazil is about to enter a new tax era. One of the pillars of this transformation is the systematic of the “plit payment” or “fractional payment”. But what does it mean, in practice, to divide tax payments directly at source, as provided by the legislation? And how does this connect to the much discussed non-cumulative tax?
For tax expert Lucas Ribeiro, CEO of ROIT, a technology and consulting company that leads the development of solutions for Tax Reform, the moment requires that the “split payment” be understood. “Afinal, is a model that can revolutionize corporate finance”, he considers.
Split payment: the revolution in tax collection
The “split payment” is a mechanism that promises to bring more security and efficiency to the Brazilian tax system. In it, the tax due is segregated at the time of payment and destined directly to the tax authorities, reducing the risks of default and tax evasion. “O “O payment eliminates tax evasion, but requires greater availability of working capital from the” companies, explains Ribeiro.
This model is already used in some European countries, such as Italy and Poland, where it helped to combat tax evasion and improve tax collection, although it works in part of operations.In Brazil, its adoption is accompanied by technological and operational challenges, but promises to change the game for companies and public administrations.
Non-cumulativity: the principle that underpins Brazilian VAT
The non-cumulative taxes, provided by the tax reform, is the guarantee that the tax only focuses on the added value at each stage of the production chain. With the creation, by the reform, of the Dual Value Added Tax (VAT) (which integrates two taxes, CBS, Contribution on Goods and Services, and IBS, Tax on Goods and Services), companies will be able to compensate the credits generated in purchases against sales debts, avoiding the cascade incidence and current cumulativity.
The challenge lies in the practical application of this principle, says Ribeiro. “A non-cumulativity seems simple, but its operationalization requires the basics: buying everything with an invoice and writing them correctly. A major change in culture, processes and systems will be essential.”, he stresses.
The tax officer lists some points that companies will need to master to better take advantage of the achievements of tax reform:
- Automating tax processes: companies that invest in technology to automate the complete flow of tax bookkeeping and payments will come out ahead.
- Strategic credit management: knowing how to calculate and use credits efficiently will be essential to maximize profit margins.
- Contractual adequacy: contracts with suppliers and customers need to be reviewed to reflect changes in rates and payment methods.
- Team training: understanding the new tax model will be a competitive differentiator. Accounting and finance professionals need to update themselves.
With the “plit payment” and non-cumulativity, Brazil is moving towards a more efficient tax model aligned with international practices. However, implementation will be challenging and will require planning, reliable data and cutting-edge technology. “Whoever master the numbers and understand the inter-lines of this new system will have an undeniable competitive advantage.And this begins now, in 2025, with companies preparing before it is too late”, highlights Ribeiro.
