The tax reform aims to make the Brazilian tax system simpler and more efficient. Although most of the attention is focused on replacing taxes such as PIS, Cofins, ICMS, and ISS with the new CBS and IBS, which we have already discussed here, the changes will also impact people management.
One of the changes concerns the possibility of taking advantage of credits on the new taxes mentioned above. To do so, the benefits offered to employees—such as food vouchers, transportation, and health insurance—must be provided for in collective bargaining agreements or conventions. Without this record, the company will not be able to use these expenses to offset taxes.
Please note: collective agreements and conventions are generally valid for two years. If a company signs an agreement in 2025 without including these benefits, it will not be able to recover the corresponding credit in 2027, which may result in financial losses.
In addition, the reform is expected to bring new ancillary obligations and will require greater integration between the tax, accounting, and human resources departments. It will be necessary to review internal processes, adjust payroll routines, and ensure that systems are prepared for the new formats for calculating and delivering data to the tax authorities.
How can HR prepare in advance?
Even though the changes will take effect over the next few years, preparation should begin now. Recommended actions include mapping the benefits offered by the company, analyzing possible tax impacts, and reviewing variable compensation policies, considering possible changes in the tax burden.
In addition, it will be necessary to integrate the HR, tax, and accounting departments, ensuring alignment in adapting to the new rules, as well as monitoring updates to the reform, which will bring more clarity on points that are still undefined.
Count on experts in this process
Pryor Global is closely monitoring all developments surrounding the tax reform and its impact on companies. Our team is ready to support companies in making the necessary adjustments during this transition period with security and compliance.
Talk to Pryor and find out how we can help your company!
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