The parallel implementation of two tax systems is likely to lead to increased litigation, particularly in the short term, although the scope and nature of these disputes will depend on how the transition unfolds in practice. System adjustments, the introduction of new compliance obligations, and the application of rules that are still being consolidated create an environment more prone to differing interpretations and disputes.<\/p>\n
This dynamic adds a layer of uncertainty for companies, as inconsistencies or interpretative divergences may affect cash flow and operational predictability. At the same time, the introduction of a new tax framework\u2014with concepts and mechanisms still evolving\u2014tends to open the door to more structural legal discussions. This, however, is a gradual process, the intensity of which will depend on the pace of regulatory consolidation and on how both tax authorities and taxpayers respond during the initial years of implementation.<\/p>\n
Despite the expected increase in litigation, the prevailing market view is not one of disruption. There is a broad perception that Brazil\u2019s institutional framework is capable of absorbing and gradually resolving these disputes. \u201cThere is confidence that these issues will be addressed and that, over the long term, the system is likely to generate net benefits,\u201d<\/em> says Rafael Amorim, partner in the Tax practice at Vieira Rezende. For investors, this suggests that a rise in disputes should be viewed as part of the transition process rather than as a structural constraint on operational viability.<\/p>\n <\/p>\n