The reform changes the starting point for structuring business operations in Brazil. Instead of operating within a stable—albeit complex—tax system, companies are now making decisions in a transitional environment in which the effects of the new model are still being calibrated in practice. “It is no longer just about minimizing tax costs, but about understanding how the business model can operate more efficiently under the new framework,” says Rafael Amorim, partner in the Tax practice at Vieira Rezende. In this context, decisions regarding operational structure, location, and supplier relationships are no longer adjusted at the end of the process but are defined from the outset in light of the new tax logic.

For foreign investors, this shift changes the analytical focus. Entry into Brazil can no longer be based solely on current tax costs, but requires a broader perspective that incorporates the trajectory of the transition. Structures that are efficient today may lose competitiveness over time, while alternatives not yet adopted may prove more suitable under the new regime. “Investors who enter without proper planning and without a clear understanding of the reform’s impacts risk becoming disoriented,” he notes. Legal counsel assumes a more strategic role, acting not only in interpreting regulations but also in scenario planning and structuring operations.

The current transition phase creates a unique window for investors assessing entry into the country. The ability to test operating models, simulate impacts, and adjust structures before full implementation reduces the cost of decisions that may be more difficult to reverse later. The complexity of the transition does not disappear, but it can be incorporated progressively as operations evolve. In this sense, early engagement with the process tends to transform the initial phase of reform from a potential barrier into a strategic positioning stage.

In practical terms, this anticipation is already translating into priority areas for 2026. Cash flow management becomes critical given the new dynamics of tax credits and debits and their impact on working capital. Contract reviews are necessary to reflect the redistribution of the tax burden across the supply chain, with direct implications for pricing and margins. At the same time, system upgrades become essential to ensure compliance and operational security during the coexistence of the two regimes. Rather than isolated adjustments, these areas are likely to guide core structural decisions as the reform progresses.

What Companies Are Testing in Practice in 2026 

The first year of the transition has been used by companies as a period to simulate and adjust their operating models, with a focus on anticipating the effects of the new tax system. Key areas under review include: 

• Logistics: Reassessment of distribution center locations and operational flows, with reduced emphasis on tax incentives in decision-making.  

• Cash flow: Simulation of credit and debit dynamics under the new system and their impact on working capital.  

• Contracts: Review of commercial terms to reflect the new tax incidence across the value chain.  

• Operational structure: Evaluation of local presence, outsourcing, or hybrid operating models.  

• Market entry models: Comparison between direct operations and structures without a physical presence in Brazil.  

• Tax infrastructure: Adaptation of management systems to support the coexistence of both tax regimes. 

The common objective is to anticipate structural decisions ahead of the full implementation of the new system. 

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