Tax reform raises an alert in industrial engineering and puts EPC contracts, heavy infrastructure, and large projects at the center of the debate.

Written by Corporativo

Published on 03/06/2026 at 13:54

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Sector sees advances in the new tax model, but demands legal security, predictability, and clear rules for long-term projects

The regulation of the tax reform has started to mobilize strategic sectors of the Brazilian economy. Among them, therefore, are the major industrial engineering and infrastructure projects, characterized by long contracts, high operational complexity, and a strong need for capital.

According to the ABEMI, Brazilian Association of Industrial Engineering, the new system brings important advances. However, it also creates significant challenges for companies operating in energy, oil and gas, mining, steel, logistics, sanitation, and heavy infrastructure.

Furthermore, as highlighted by Maria Michielin, legal director of ABEMI, the practical application of the reform requires attention to the characteristics of industrial contracts. After all, these projects involve complex chains, sophisticated schedules, and long-term investments.

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EPC contracts become the focus of concerns

In this context, one of the main points of attention involves the non-cumulativity in EPC contracts, also known as turnkey. These contracts combine engineering, procurement, and construction in broad operations.

Therefore, ABEMI assesses that there are still doubts about the real elimination of tax residues. Although broad non-cumulativity represents a positive principle, its practical application still concerns the sector.

Moreover, long and fragmented production chains can make operationalization more difficult. Thus, complex contracts may face tax uncertainties during execution.

Cash flow and tax credits concern the sector

Another sensitive point, therefore, involves the cash flow of industrial and infrastructure projects. As many ventures progress over several years, there is concern that taxes may be paid before the effective generation of cash.

According to Maria Michielin, industrial engineering does not work with ready-made products. Each project, therefore, has its own logic of execution, measurement, and financing.

Consequently, any tax mismatch can affect the economic-financial balance of the contracts. Additionally, the recovery of credits also appears as a central concern.

After all, large works require upfront investments in equipment, technology, and inputs. Therefore, ABEMI advocates for speed, predictability, and security in the return of tax credits.

Predictability will be decisive for new investments

Furthermore, the entity emphasizes that regulatory predictability will be essential to unlock investments in infrastructure, industrialization, energy transition, and national competitiveness.

For ABEMI, large projects depend on legal stability. Thus, financing, planning, and long-term contracts can advance with more security.

Finally, the association advocates for technical dialogue between the government, the productive sector, and specialists. According to Maria Michielin, the reform will only be effective if it considers the operational reality of national engineering.

In this way, the new tax model can function not only on paper but also in the practice of large Brazilian projects. After all, without competitive engineering, how can Brazil execute its own strategic projects?

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Tax reform raises an alert in industrial engineering and puts EPC contracts, heavy infrastructure, and large projects at the center of the debate.

Sector sees advances in the new tax model, but demands legal security, predictability, and clear rules for long-term projects

EPC contracts become the focus of concerns

Cash flow and tax credits concern the sector

Predictability will be decisive for new investments

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Tax reform raises an alert in industrial engineering and puts EPC contracts, heavy infrastructure, and large projects at the center of the debate.

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