Brazil is completing the largest tax reform in recent decades. Starting from January 1, 2027, the country will completely switch to a new double VAT system: the CBS federal tax and the regional IBS will replace five existing fees at once — PIS, Cofins, IPI, ICMS and ISS. For e-commerce and international trade, this changes the whole logic of calculations within Latin America's largest market.
The new model should remove tax congestion, due to which foreign sellers have been faced with different rates in the regions, complex administration and double taxation for years. The Brazilian authorities are betting on a more transparent fee structure and a uniform tax calculation principle throughout the entire product chain.
The transition looks massive even by the standards of large economies. Before the reform, companies operated with several levels of taxation at once — federal, regional and municipal. Each product category could fall under different rules depending on the state and the sales channel. For international sellers, this turned into fixed costs for local consultants, separate accounting schemes and tax adjustments.
The CBS and IBS system should reduce some of these problems. Businesses will receive a more understandable settlement structure and a single tax offset mechanism. The main difficulty now is related to the transition period. Before the reform is fully launched, companies will have to maintain two accounting systems in parallel: the old one and the new one. This applies to contracts, ERP systems, tax reporting, and pricing on marketplaces.
Russian exporters and suppliers will have to consider the reform now. Contracts that will be valid after January 1, 2027, require a review of tax conditions in advance. An error in calculations can affect margins, shipping costs, and the final price of the product within Brazil.
The topic is becoming particularly sensitive for companies operating through e-commerce and marketplaces. Brazil remains one of the fastest growing online trading markets in the world. After increased control over cross-border imports and an increase in the tax burden on cheap foreign goods, the market is increasingly shifting towards local platforms and official supply chains.
The new tax architecture will accelerate this process. Foreign sellers will have to integrate deeper into the Brazilian trading system through local partners, warehouses, tax representatives and official import channels. The simple model of direct cross-border sales is gradually losing its effectiveness.
The Brazilian reform is already affecting the strategy of international companies. Major players are rebuilding accounting systems in advance, reviewing the structure of contracts, and testing new settlement schemes. This is a signal for Russian businesses: entering the Brazilian market now requires not only logistics and marketing, but also full-fledged adaptation to the country's new tax model.
