Brazil’s current tax system, widely recognized as complex and burdensome, is acknowledged as one of the main obstacles to business development in the country, as evidenced by Brazil’s 124th position in the World Bank’s Doing Business 2020 ranking. Faced with this scenario, Tax Reform presents itself as a necessary transformation to simplify fiscal bureaucracy, allowing companies to direct their efforts toward strategic activities and innovation, while creating a more competitive and attractive environment for investments, both domestic and foreign.
The reform proposes significant structural changes, including the creation of a dual VAT composed of CBS (Contribution on Goods and Services) at the federal level and IBS (Tax on Goods and Services) at the state and municipal levels, which will replace five existing taxes: ICMS, ISS, PIS, COFINS, and IPI (for products from the Manaus Free Trade Zone). In parallel, a Selective Tax will be established on products considered harmful to health and the environment, with exceptions for specific sectors such as electricity, telecommunications, and exports. This transition will take place gradually between 2026 and 2033, starting with a lower initial rate in 2026 until 2034, when only the new taxes will apply.
Beyond changes in the tax structure, the reform seeks to establish a fairer and more balanced system by the granting of tax incentives by states and promoting greater transparency in the disclosure of taxes levied on each transaction. Measures such as split payment should strengthen oversight and contribute to simplifying the collection of consumption taxes. Although these changes represent a unique opportunity to modernize Brazil’s business environment, their implementation will require companies to make significant adjustments to their processes and systems to ensure efficient adaptation to the new rules, with predictability and careful planning being key factors for the success of this transition.
Financial impacts of Tax Reform on companies
Tax reform will bring significant impacts on companies’ financial management, especially on cash flow, with the early payment of taxes before offsetting tax credits – which can reduce cash predictability by up to 15% in the first year, according to Febraban.
The main effects include:
– Changes to the financial cycle: Need to review working capital and adjust financial projections;
– Structural changes: Implementation of VAT (with new calculation and collection rules), Split Payment (changing the payment method), and adaptation of tax processes;
– Sectorial impact: Companies that rely on tax benefits will be most affected, requiring long-term replanning.
Beyond operational challenges, the reform will influence strategic decisions, from new investments to the continuity of existing operations. Adaptation will require deep adjustments to financial systems and processes to maintain the economic health of organizations in this new tax scenario.
Oracle’s support for its customers during Tax Reform
Oracle , through events and communications, informs that it is proactively monitoring tax reform changes, with specialists and development teams already adapting their cloud solutions to ensure compliance and customer support. The Oracle Fusion Cloud ERP suite, which encompasses the management solution offered by Oracle, enables your company to have intelligent automation (powered by AI) to reduce manual processes, provide real-time analytics for agile decision-making, and automatic updates that ensure ongoing compliance – offering the agility and security needed to navigate this scenario of change with competitive advantage.
What are the advantages of the Oracle Fusion Cloud ERP suite?
– Anticipate, identify, and respond to unforeseen scenarios
While traditional systems are limited to predefined data, the Oracle Fusion Cloud ERP solution uses machine learning for predictive planning, analyzing large datasets to reveal trends, detect deviations, and accelerate responses. The crucial difference lies in the approach: while conventional ERPs focused on rigid processes, Oracle prioritizes data intelligence – allowing processes to be fully adaptable to each business’s reality. This data-driven flexibility demonstrates why Oracle leads the evolution of enterprise systems.
– Optimize your operations with smart automation
Focus on strategic analysis. With the Oracle Fusion Cloud ERP solution, you reduce the manual workload in repetitive operational processes, freeing your team for higher-value activities – from data interpretation to evaluating opportunities like mergers and acquisitions. Transform time spent on spreadsheets and compilations into decisive insights for your business.
– Automate and simplify your operations with AI and Machine Learning
Oracle’s digital assistant, powered by AI, allows you to perform daily tasks quickly through simple commands – such as checking pending purchase requests or daily reconciliations. The system acts proactively, sending personalized alerts (such as invoices or budget overages) to accelerate approvals.
The crucial difference lies in the Machine Learning: while old systems required complex reprogramming for each change in business rules, Oracle’s solution adapts dynamically. The model evolves continuously, learning from new scenarios and suggesting improvements – transforming rigid processes into intelligent workflows that adapt to your company’s actual needs.
How to ensure tax compliance with Oracle solutions during Tax Reform?
Keeping your Oracle ERP up to date is essential to automate new tax rules, avoid errors and penalties, and take advantage of opportunities such as tax simplification and tax credits. Lack of preparation can result in incorrect calculations, billing disruptions, increased operational costs, and loss of tax benefits – directly impacting cash flow and exposing the company to legal risks.
Additionally, non-compliance can reduce attractiveness to investors and harm corporate reputation, while bureaucratic manual processes decrease competitiveness.
To face fiscal changes safely, Synchro’s solutions integrate with Oracle systems, ensuring rapid implementation and reducing tax risks.
How does Synchro facilitate adaptation to Tax Reform?
With 33 years of experience and nearly 400 clients, Synchro is a specialist in tax solutions that help companies navigate Tax Reform safely and efficiently.
– Key benefits:
Compliance assurance - Update processes and systems to avoid penalties
Tax optimization - Identifying tax credits and adjusting prices/contracts
Risk reduction - Specialized consulting and automation to minimize errors
Lower costs - Solutions that streamline and accelerate tax calculations
Integration – Developed and continuously updated by Synchro, in partnership with Oracle, provides greater security and efficiency for processing data and completing tax compliance tasks in time to meet the challenging deadlines imposed by tax authorities
– Competitive advantages:
Reliable operational continuity
Better balance between profits and taxes
Protection of financial health and reputation
More streamlined and cost-effective tax processes
Synchro transforms adaptation to Reform into a strategic opportunity, modernizing tax management and adding value to your business.
Sources:
https://www.oracle.com/br/erp/#rc30p2
https://blogs.oracle.com/oracle-brasil/post/5-perguntas-frequentes-sobre-o-oracle-erp-cloud-v2
https://blogs.oracle.com/oracle-brasil/post/as-vantagens-de-migrar-seu-erp-on-premise-para-nuvem-v2
https://blogs.oracle.com/oracle-brasil/post/5-perguntas-frequentes-sobre-a-cloud-da-oracle-v2