Pricing in Tax Reform: What companies need to consider

Tax Reform requires a review of how businesses set their prices

Fabiana Soares

Although the debate on tax reform often focuses on fiscal and legislative aspects, its effects extend beyond tax departments and impact one of the most strategic decisions any company makes: pricing.

Under the new tax model, organizations will need to review their pricing methodologies and assess how the new tax dynamics will affect costs, margins, contracts, market positioning, and customer relationships.

In this new context, synergy among the tax, finance, procurement, and commercial departments is essential.

The joint assessment must include items such as: the value and timing of credit usage, the impact on the effective cost of the transaction, the new rules for calculating IBS and CBS, supplier behavior, prevailing margins, and commercial terms.

Below are key points to consider in this new scenario:

Impact on the Pricing of Products and Services

One of the main changes introduced by the Tax Reform relates to how consumption taxes are calculated and reported. With the implementation of the IBS (Goods and Services Tax) and CBS (Contribution on Goods and Services), taxes will now be levied solely on the transaction amount, that is, they are “external” taxes, unlike the current situation with ICMS (Value-added tax), ISS (Services Tax), PIS (Employee’s Profit Participation Program), and COFINS, which are levied on themselves.

This change more clearly distinguishes between what is a tax and what is the actual price, increasing transparency in price composition.

At this time, the CBS rates to be applied to transactions occurring on or after January 2027 are not yet known. However, this should not prevent companies from beginning to review their pricing models, segregate their net price from taxes, adjust contractual clauses, and renegotiate with customers—especially those who will be entitled to a tax credit for the new taxes.

For companies, there is a major challenge in implementing all these adjustments by the end of 2026, even though not all variables have been defined by the tax authorities.

What to consider when setting prices

Taxpayers should keep in mind the changes related to how calculations are adjusted, credit management, cash flow, and margins.

Taxes such as PIS, Cofins, ISS, and ICMS are currently embedded in the final price of the product. Under the new model, however, CBS and IBS will be added “separately,” providing greater transparency regarding the tax burden.

The change to the CBS takes effect in January 2027, when PIS and COFINS will be phased out. Changes related to the IBS, on the other hand, will take effect starting in 2029, when the transition period for ICMS and ISS begins.

This lengthy transition period, with varying rules and tax rates over the years, is also likely to complicate pricing, particularly in long-term contracts. Therefore, it is recommended that contracts strike the necessary legal balance between flexibility and certainty for the coming years.

Another point to consider is that the system will become fully non-cumulative. Any tax paid at earlier stages of the supply chain will be converted into a tax credit for the buyer, regardless of the intended use of the goods or services purchased (except for items that fall under the definition of personal consumption as defined by law).

Sectors most affected by changes in pricing

Although all business areas are affected by the Tax Reform, some segments are likely to feel the effects more acutely. Sectors characterized by high competition, low margins, or high consumer price sensitivity, particularly sales to non-taxpayers, will need to conduct even more detailed analyses.

The services sector requires attention, especially activities that generate fewer tax credits and have a high proportion of labor costs.

Meanwhile, companies operating within complex supply chains will also need to assess the effects on suppliers and customers.

It is essential to understand that the impact of the reform will not be determined solely by the applicable tax rate, but by each company’s position within the economic chain.

What to do now?

Although the reform will be implemented gradually over the next few years, its effects on business management are already being felt.

The transition period, which began in 2026, has been crucial for assessing impacts, adjusting systems, reviewing tax records, and running price simulations.

This period should be used to test scenarios, evaluating:

• maintaining current prices;
• full or partial passing on of tax impacts;
• reviewing margins;
• changing suppliers;
• adjusting commercial contracts.

Companies that devote themselves to these analyses will be better able to adapt once the new system is fully implemented.

Pricing expands its strategic role

The Tax Reform underscores that pricing should not be treated as a mere consequence of costs, but as a strategic decision.

Organizations that use the transition period to analyze impacts, review calculation models, and improve their processes will be better positioned to turn the tax change into an opportunity for management improvement.

Tax Reform consulting

Domingues e Pinho Contadores supports companies in adapting to the Tax Reform, providing advisory guidance on best practices and ensuring compliance with operational procedures. Count on this analysis and support: dpc@dpc.com.br.