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Tax Reform Creates a VAT with IBS and CBS Equal for All, Removes Hidden Advantages of Simples Nacional and Presumed Profit, and Changes the Logic of Competition Between Companies
The Brazilian tax reform will not only affect rates and names of taxes. It tends to change the way millions of businesses choose their tax regime and position themselves in the market. In practice, Simples Nacional and presumed profit continue to exist in law, but lose much of their competitive edge as the new VAT, composed of IBS and CBS, centralizes consumption taxation uniformly.
This means that the old “tax staircase” – starting in Simples, migrating to presumed profit, and only then facing actual profit – no longer makes sense for a significant portion of businesses, especially in services and B2B. With the consumption tax being the same for everyone, Simples Nacional and presumed profit cease to be an automatic synonym for paying less and become just another piece in a game where IBS and CBS credits and cost structures will determine who survives.
Simples Nacional, Presumed Profit, and Actual Profit: How the Logic Works Today
Today, Brazil has about 18 million companies registered under Simples Nacional, accounting for around over 80% of active CNPJs. This is not by chance. Simples offers two valuable assets for the small entrepreneur: less bureaucracy and an implicit economic benefit.
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Within the single DAS rate, there are embedded portions of ICMS, ISS, PIS, and Cofins that are lower than would normally be due under the “full” regime, making this structure very attractive.
The presumed profit has become the natural route for those who exceed the Simples limit but are not yet ready for actual profit.
It is especially important for service companies because today the combination of PIS and Cofins in the cumulative model, at around 3.65%, represents a much lighter burden than the approximately 9.25% of the non-cumulative regime. In other words, many service companies are only viable because they are under presumed profit.
The actual profit, in turn, is the technically fairest regime: the tax is levied on actual profit, not on revenue or assumed margins. In theory, it would allow for lower payments, especially for businesses with tight margins.
But, in practice, the compliance cost drives away most small and medium-sized businesses. It requires complete accounting, detailed reporting, recording of deductible expenses, and a good accounting structure. As a result, only larger, more mature, and organized businesses dare to utilize everything that actual profit offers.
What Changes with the New VAT, IBS, and CBS
With the reform, Brazil is moving toward a dual VAT, consisting of IBS (a tax shared by states and municipalities) and CBS (a federal contribution), highlighted on invoices, non-cumulative, and with wide financial credits. The logic is simple and harsh: equal consumption tax for all, regardless of the size of the company or tax regime.
Projections indicate a CBS of around 9.25% and an IBS of about 18%, adding up to around 27% tax burden on goods and services in many cases. It is a high tax, and importantly: it becomes visible and itemized on the invoice, even for those under Simples, in the “hybrid” mode provided by Complementary Law 214.
In this configuration, the main hidden advantage of Simples Nacional – the lower consumption tax through DAS – tends to disappear. Even remaining in the simplified regime for IRPJ, CSLL, INSS, and other taxes, the entrepreneur will operate IBS and CBS at the same level as the larger companies, under the same VAT.
Why Simples Nacional and Presumed Profit Lose Strength
Today, those in Simples can sell to larger companies without “harming” the client: the legislation allows those under actual profit to take full credit for PIS and Cofins even when purchasing from a Simples supplier, who in practice paid less tax embedded in DAS. It’s a fictional credit, but extremely advantageous for the small supplier.
With the post-reform VAT, the client’s credit becomes limited to the tax effectively collected by the supplier. If the supplier is under Simples and does not itemize IBS and CBS, they will deliver less tax credit to the buyer. In B2B markets, this tends to be deadly: suppliers who do not generate full credits lose competitiveness compared to those who fully itemize IBS and CBS.
Result:
Simples Nacional and presumed profit cease to be “cheap by nature” regimes and become, in many cases, a competitive burden.
To continue playing the B2B game, the small entrepreneur will have to at least adopt the hybrid Simples, itemizing IBS and CBS on the invoice, or consider migrating to actual profit.
Presumed profit, in particular, loses almost everything that made it attractive. Without cumulative PIS/Cofins of 3.65% and with non-cumulative CBS at 9.25% plus IBS at around 18%, the burden skyrockets. And since there is no similar gain in credits as there is with actual profit, the regime becomes squeezed: not-so-simple bureaucracy, not-so-low burden.
Service and B2B Sectors: Where the Impact is Strongest
Those who tend to suffer the most from this new order are the service-intensive sectors with little expense that generates credit: technology, marketing, consulting, education, health, beauty, IT, among others.
These companies:
Currently pay lower cumulative PIS/Cofins, favoring presumed profit.
Have few physical inputs, little purchase of goods, and low spending on items that generate relevant IBS and CBS credits.
In the post-reform scenario, CBS rises to around 9.25% and IBS to about 18%, with a limited credit base, because cost structures do not change overnight. The calculation is straightforward: the burden can more than double in many cases, while the room for compensation is small.
For B2B companies, which sell to other businesses that take credits, the equation is even tougher. A supplier that does not generate full credits becomes less valuable. And this pushes service businesses into an uncomfortable choice:
Stay in Simples Nacional and presumed profit and lose competitiveness.
Or migrate to actual profit, assume higher accounting costs, but maximizing IBS and CBS credits and taxing only actual profit.
Where it Still Makes Sense to Stay in Simples Nacional
Not everything is tragedy. Not every business will be expelled from Simples Nacional and presumed profit in the same way. The impact is quite different for those operating mainly in B2C, selling to end consumers.
Beauty salons, bakeries, neighborhood restaurants, local auto repair shops, small retailers that sell directly to individuals and hardly deal with businesses that take VAT credits tend to continue finding value in Simples. In these cases:
- The end customer does not benefit from IBS and CBS credits.
- The lower bureaucracy of Simples Nacional remains a real differentiator.
- The customer’s sensitivity is to the final price, not to the tax credit.
In these segments, Simples Nacional and presumed profit can still remain competitive, especially for smaller companies focused on local service. Even so, the analysis will have to be more nuanced than today: the weight of the burden on consumption, cost composition, profit margin, and client profile will need to be factored in.
Why Actual Profit Becomes the “New Normal” for Thousands of Companies
When VAT becomes the same for everyone and Simples Nacional and presumed profit cease to concentrate advantages on consumption, the key question changes. Instead of “which regime pays less by definition?”, the doubt becomes:
Which regime allows me to recover more credits and pay tax on the most just possible base?
In this new environment, actual profit ceases to be a “boogeyman of large enterprises” and starts to appear as a point of balance for many businesses. Reasons:
In actual profit, the company taxes its actual profit, which is advantageous for those operating with tighter margins.
All possible IBS and CBS credits can be utilized, which reduces the VAT burden throughout the chain.
If the entrepreneur is already required to itemize IBS and CBS on the invoice to maintain competitiveness, the psychological barrier against actual profit diminishes.
In practice, many companies will end up migrating to actual profit not because it has become cheaper, but because the other regimes have become expensive and lost their differential. The staircase “Simples → presumed profit → actual profit” dissolves, and the planning becomes: “which combination of regime and accounting structure gives me more credit, more competitiveness, and less tax at the end of the year?”.
How to Prepare for the Transition and Not Be Caught by Surprise
The tax reform will have a transition phase and will only be fully implemented by around 2033, but the first effects of VAT will appear in the coming years, still with symbolic rates. This is small in absolute value but huge in terms of signaling.
For those currently in Simples Nacional and presumed profit, especially in services and B2B, the message is clear:
- No longer can tax regime be treated as a bureaucratic detail.
- It will be necessary to simulate scenarios with and without migration to actual profit, considering IBS and CBS credits, profit margins, and client profiles.
- Organizing accounting, classifying expenses, and understanding what is deductible is no longer a luxury but a condition for survival.
The reform does not only penalize those who earn a lot. It primarily penalizes those operating with small margins and little wiggle room. Small and medium-sized enterprises that do not plan are at risk of discovering the impact of the reform in practice, already with tight cash flow.
And you, have you started simulating how the tax reform will affect your company? Do you think you will continue in Simples Nacional and presumed profit, or are you considering migrating to actual profit to remain competitive?
Vai ser panico major, quero nem ver kkk
Excelente artigo. Quem critica não entende nada de nada…
O país está afundando em mare a berto, o nosso Brasil tem mais de 18 milhões de abitante recebendo uma migalha de 600 reais, isso faz eles não trabalham e nem procura o trabalho diguino, no momento esta sobrando emprego, eles não estão nem aí, certeza votar errado nas próximas eleições, quando eles acordam pra vida vai ser tarde de mais, não vai essa migalha pra comprar comida e nem trabalho, o choro vai ser maior, quem sabe nessa próxima eleições ele acorda pra vida e vota certo.
Vocês já parou para pensar que essa migalha, ajuda muitas que trabalham? Te dou um ex. Um pai de família que recebe em media 3.000,00 e com esse dinheiro tem que pagar aluguel porque ele não tem casa própria e nem dinheiro para aplicar e pagar e pagar o aluguel com dividendos, casas essas que está na mão dos que tem mais, ee além do aluguel precisa pagar água, luz, e comer, essa ajuda é primordial , e já pensou, que essas pessoas não conseguem o emprego por não tiveram a oportunidade que você teve de conhecimento e preparo para o mercado de trabalho? Cuidado serás julgado com mesma medida que está julgando.
Qualquer brasileiro digno pediria menos impostos para que, justamente os empresários que giram a economia gerando empregos, consigam prosperar e o país consiga ter um ambiente mais favorável a geração de novos negócios fortalecendo a economia nacional e brigando com empresas do exterior.
Esse pensamento de que os ricos precisam ser mais taxados etc. Quem bate palma para isso é ignorante ou age de má fé, pois é obvio que isso cairá na conta do mais pobre que usa produtos e serviços de alguma empresa.
Por fim, o ambiente favorável para essa pessoa que você citou que ganha 3 mil reais por mês é ter o menor peso possível do estado. Desta forma, abrindo o mercado e deixando ele mais competitivo, empresas oferecerão o melhor serviço a um preço mais baixo possível para não perder para a concorrência.
Agora imagine isso com empresas de energia, gás, água, etc. Eu moro no RJ. Aqui eu já não vejo esperança e quando falta luz eu não posso simplesmente cancelar e colocar outra. Quando a conta vem errada, na minha visão, é um parto para contestar. Não posso ir para outro lugar, pois toda cidade possui o monopólio.
O ‘governo’ defende também a energia limpa e no governo atual o imposto sobre painés solares foi para 20%-25%.
É só ladeira abaixo, mas pra quem quiser ficar defendendo o Lula e as atrocidades que ele e seus camaradas fazem, tudo bem. Fico triste apenas pelos mais humildes e ignorantes que não observam isso para termos um ar de esperança no futuro.