Tax Reform: Payment by the acquirer changes tax practices

How RAD works and key points of attention

By Fabiana Soares

As of January 2027, the Tax Reform will introduce a stage that companies should pay close attention to: tax payment by the acquirer (RAD), provided for in Article 36 of Supplementary Law No. 214/2025.

This model will begin with the collection of the Contribution on Goods and Services (CBS), within the new tax framework, in which the right to the credit is effectively conditional upon the tax payment.

How does RAD work?

When opting for RAD, the buyer assumes responsibility for paying the taxes on the transaction, instead of paying the full amount of the product or service so that the supplier can fulfill this obligation.

By having the acquirer pay the tax directly, the right to the credit is no longer dependent on the action of a third party.

In day-to-day practice, this places control and predictability in the hands of the buyer. At the same time, it impacts routines, systems, and business relationships.

RAD and split payment: what is the difference?

Both RAD and split payment serve the purpose of ensuring that tax amounts reach the public treasury.

Expected to become fully operational in 2028, split payment will automate the collection of CBS and IBS at the time of the transaction, with the tax credit being released once payment is completed.

For this mechanism to work, however, the country’s banking infrastructure must still be able to support this practice. The payment institution will calculate the amount and operationalize the tax collection.

Until then, RAD plays the role of allowing the buyer to assume payment of IBS and CBS and, in this way, secure the tax credit.

Is RAD mandatory?

No. RAD will be optional. Its adoption should take certain aspects into account and may be used on a case-by-case basis, as agreed between buyer and seller.

Key points to note about RAD

Collection by the Purchaser appears to be an interesting option for buyers, but, from the sellers’ perspective, it is not clear how monitoring the extinguishment of the tax will work, the responsibilities of each party, among other important rules that have not yet been clarified by the tax authorities.

This is a model that works to protect the tax credit on the purchase, but it still depends on regulation regarding its operation to ensure legal certainty for those involved in commercial transactions.

In addition, companies that intend to use this modality should pay attention to the need to configure their internal systems for this automatic split of the amount related to the tax.

It is also necessary to analyze how this will be adopted on a day-to-day basis, whether in all contracts or only for certain suppliers.

In the case of a supplier that represents a risk, such as a weak tax structure or being under judicial reorganization, for example, RAD may be a control and prevention tool.

As with any tax-related decision during this period of intense changes, the option for RAD must be carefully analyzed and not adopted by default or based on what other companies have been doing. It is therefore essential to rely on specialized support to understand the specific impacts and benefits for each business.

Tax Reform Consulting

With offices in Rio de Janeiro and São Paulo and a network of correspondents in Brazil’s main cities, Domingues e Pinho Contadores supports companies at every stage of adaptation to the Tax Reform. Regardless of your business’s stage in this transition process, our tax team can help. Contact us: dpc@dpc.com.br.