When is it worth reviewing the company’s tax structure?

Whenever the company changes in size, operations, or strategy, it is worth reviewing its tax structure. This usually happens when the company:

• Starts selling to new states or countries;

• Serves a new type of customer, such as an individual, another company, or a government agency;

• Changes the mix of products or services offered;

• Grows in size and effectively moves into a different tax regime, even without having formally made the change.

Each of these changes affects how the company calculates and pays taxes and uses tax credits, even if it remains under the same tax regime, uses the same invoice, and relies on the same system as always.

The tax paid is only one part of the equation

A common mistake is to measure the tax impact based solely on the amount paid during the month. When a company starts selling to other states, for example, there may be effects on credits, pricing, and cash flow that do not appear on the tax payment slip but do appear in the operating results.

For this reason, a review of the tax structure must consider the entire operation: the final price charged to the customer, the margin per product, and the cash available for reinvestment, not just how much tax is paid.

Regulatory changes also call for a review

Brazil’s tax environment is undergoing transformation, and the tax reform changes rules that affect companies of different sizes and industries. This does not mean making rushed decisions. It means preparing methodically through an assessment of the current situation, scenario comparisons, and ongoing technical support as the new rules come into effect.

Reviewing the structure in advance is usually simpler than correcting it after a tax assessment or a cash flow problem.

How VBR supports this review

VBR provides tax consulting, tax planning, and tax compliance services to companies that need to adapt their structure to the current stage of their business and to the changes introduced by the tax reform. Each review considers the company’s operation as a whole, not just the tax payment slip.

If your company has changed in size, entered a new market, or is preparing for the tax reform, contact VBR’s team through the link in our bio or via our institutional website.