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country-icon Brésilien

07.18.23

Major fiscal reforms

Our recent post commented on the political changeover in Brazil. As is often the case, political shifts correspond with significant fiscal adjustments, as new governments seek to assert their own agendas on the wider economic framework.

True to promise, the new government in Brazil appears to be preparing to implement major fiscal changes in the country that look set to permanently alter the fiscal circuit in the country.

The reforms, expected to take place from 2026, will merge the current five levies in the country into a value-added tax (VAT) with separate federal and regional rates.

In a long-term indication of Brazil’s ambitious plans, tax will be determined from where goods are consumed as opposed to where they are produced, stretching over a 50-year transition period commencing from 2029.

The tax reforms are radical and will inevitably spawn debate in the Senate. Currently, the reform has been approved by the Lower Congress, and will now be sent to Senate for a definitive conclusion.

Kofax will monitor further updates in respect of the same.

South America is currently hosting some exciting e-invoicing developments in the region- you can read more about these here.

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