On March 11, Origen Tech and UX Innovation gathered around 100 participants at SAP’s headquarters in São Paulo to discuss one of the most pressing issues facing for the Brazilian business ecosystem: Brazil’s Tax Reform and its impact on SAP fiscal compliance processes.
The event featured renowned experts who examined the legislative changes, transition challenges, and how companies can prepare for this transformation of SAP solutions.
Key Changes in Brazil’s Tax Reform
Constitutional Amendment 132/2023 and its complementary bills introduce a new tax framework in Brazil. The current model will be replaced by a Value-Added Tax (VAT) system, introducing the Contribution on Goods and Services (CBS) and the Tax on Goods and Services (IBS), as well as the Selective Tax (IS), which applies to goods deemed harmful to health and the environment.
Tax law expert André Blanco, a Master in Tax Law and partner at Dessimoni Blanco Advogados, provided an in-depth explanation of the reform’s implementation timeline and key challenges for businesses, including the complexity of transition rules and the need to reassess current tax regimes.
Another crucial change is the implementation of the split payment mechanism, which enables automatic tax collection at the time of financial transactions. While this model aims to reduce tax evasion, it also requires significant adjustments in financial management and ERP systems.
Impact on Businesses and SAP Solutions Adjustments
The tax changes directly impact SAP system configuration. Some of the main challenges discussed at the event include:
- Fiscal layout updates: New models for Electronic Tax Invoice (NF-e) and SPED reporting.
- Pricing adjustments: Taxes will be calculated separately, requiring a revision of pricing structures for products and services
- Tax credits: The new non-cumulative rule will allow greater credit utilization, impacting company cash flow.
- Adoption of split payment: Integration with banking and financial services will be necessary.
Knut Barthel, Head of Localization Product Management for Latin America at SAP Brazil, presented SAP’s roadmap for implementing these changes. He highlighted solutions such as Regulatory Change Manager and SAP Document and Reporting Compliance (DRC), which will support companies in ensuring a smooth transition.
How should companies prepare?
Experts emphasized the importance of structured planning for the tax transition. Key recommendations include:
- Detailed analysis of fiscal impact: Assessing how the changes will affect costs and profit margins.
- Review of contracts and suppliers: The new tax framework may require renegotiations.
- Team training: Preparing tax, finance, and IT teams for the new regulations.
- System updates: Ensuring ERP solutions are fully equipped to handle the new tax framework and credit rules.
During the practical strategies for tax transition panel, Gabriela Buzaglo, Brazil Localization Manager at Origen Tech, highlighted the importance of reviewing internal processes and adopting best practices to mitigate risks and ensure compliance with the new requirements.
Brazil’s Tax Reform marks a turning point for the country’s business environment, bringing both challenges and opportunities. Companies that proactively adapt and leverage SAP’s technological solutions will be best positioned to navigate this transition efficiently and securely.
Origen Tech and UX Innovation will continue to monitor developments and provide strategic support to businesses needing to adapt to this evolving tax landscape.
