Tax Reform: why does your firm need to prepare now?
The Tax Reform, provided for in Constitutional Amendment No. 132/2023, has already begun to reshape the Brazilian tax system. The changes will come into effect gradually; however, it is important to clarify that, in 2025, the impacts will relate to preparation, tax analysis, and the adjustment of firms for the significant changes to come, and not to the direct collection of the new taxes. In 2026, the CBS (Contribution on Goods and Services) and the IBS (Tax on Goods and Services) will enter a testing phase, with symbolic rates applied in parallel with the current taxes. The collection with effective rates will begin in 2027, still coexisting with PIS (Social Integration Program), Cofins (Social Contribution on Billings), ICMS (Tax on the Circulation of Goods and Services), and ISS (Tax on Services), following a gradual transition schedule until 2033, when the new system will be fully implemented. This is a time for adjustment, planning, and tax review, and having specialized partners is the first step toward turning these changes into opportunities — avoiding operational risks, loss of benefits, and reduced competitiveness. The current model, with taxes such as PIS, Cofins, ICMS, and ISS, will be gradually replaced by: CBS – Contribution on Goods and Services (federal); IBS – Tax on Goods and Services (state and municipal); and IS – Selective Tax (on products harmful to health and the environment). This change is not limited to “replacing codes” in invoices. It requires a complete review of the tax framework and of fiscal and accounting routines, affecting prices, margins, tax credits, cash flow, and even the corporate structure of business groups. Especially for firms with multiple CNPJs (National Corporate Taxpayer’s Register), branches, special tax regimes, or those participating in public bids, the transition will be complex. Among the urgent actions are: Review of the current tax regime – assess whether the Simples Nacional (Simplified Taxation System), Presumed Profit, or Actual Profit regime will continue to be advantageous. Comprehensive tax assessment – map ancillary obligations, hidden risks, and tax credits to be recovered. Transition planning – understand each phase of the reform schedule and its operational impacts. Adjustment of documents, registrations, and agreements – update terms and practices for the new tax system. These steps are strategic for firms that depend on clearance certificates, own real estate property, operate in more than one state, or plan corporate restructuring. In this moment of transformation, having qualified technical support ensures security in decision-making and efficiency in adaptation. The correct interpretation of the new legislation and the strategic management of tax obligations can turn the tax reform from a challenge into an opportunity. Count on those who understand to turn changes into opportunities Learn how to prepare your firm for the new tax reality brought by the tax reform. Count on those who understand to turn changes into opportunities Learn how to prepare your firm for the new tax reality brought by the tax reform.
Foreign administrator in Brazil: legal rules, mandatory power of attorney, and adaptation of public bodies
Law No. 14,195/2021 (Business Environment Improvement Law) brought a significant change, allowing non-resident foreigners to hold the position of administrator or officer of Brazilian companies. Previously, this possibility was restricted, making corporate governance more difficult for companies with international participation. The permission came with a requirement: the administrator residing abroad must appoint an attorney-in-fact domiciled in Brazil, with powers to receive legal summonses and manage assets and rights. This rule was detailed by article 03 of the DREI/ME Normative Instruction No. 112/2022 (which amends DREI/ME Normative Instruction No. 81 of 2020), regulating the matter in practice. Although the legal change was positive, its practical implementation encountered obstacles. Many commercial registries were not prepared: the electronic systems did not even have fields to include the foreign administrator’s attorney-in-fact. Even the Federal Revenue Office itself, via Redesim’s National Collector, had to make adjustments to allow the registration of members and administrators residing abroad. Currently, both the Federal Revenue Office and several other boards have already updated their systems. However, there are still difficulties in municipal bodies, which, in many cases, do not have appropriate forms. This requires workaround solutions and specialized technical support to ensure the regularity of the registration. It is important to emphasize that the obligation is not restricted to foreigners. A Brazilian who becomes a resident abroad and holds a position as an administrator or officer in a Brazilian company must also appoint an attorney-in-fact residing in Brazil. The logic is the same: to ensure that there is always a local representative authorized to respond before the Courts and administrative bodies. Issuing a CPF is essential for the inclusion of the foreign administrator in the company’s Corporate Structure before the Federal Revenue Office. The Federal Revenue Office requires the CPF to identify and recognize a person. This issuance can be done directly by the Federal Revenue Office or at the Brazilian consulate in the administrator’s country of residence, which makes the process safe and agile. While some public agencies are still facing difficulties, banks have been quicker to adapt. Once the CPF has been issued, the opening and maintenance of accounts for companies managed by nonresident foreigners already follow the regular process, provided that the power of attorney is properly prepared and registered with a notary public. The presence of a foreign administrator brings governance and international integration benefits, but it also requires formal care. The mandatory power of attorney must be clear, contain the powers required by law, and be translated, apostilled, and registered with a Registry of Deeds and Documents in Brazil. Without it, the registration request may be denied, delaying business and operations. The legal amendment has opened new opportunities for companies with international investors and administrators, but in practice, there are still differences in interpretation and adaptation among states and municipalities. PLBrasil Legal Representation monitors these requirements on a daily basis and provides assistance throughout the entire process — from the proper drafting of the power of attorney to filing with the commercial registries — including the implementation of solutions when local systems are not yet prepared. Our goal is to ensure security and efficiency for companies with foreign administrators or Brazilian residents abroad. We specialize in company incorporation and regularization Comprehensive support for the incorporation of your company in Brazil. Talk to our specialists and start operating with confidence. We specialize in company incorporation and regularization Comprehensive support for the incorporation of your company in Brazil. Talk to our specialists and start operating with confidence.