4th Contract Governance Forum Discusses the Impact of Brazil’s Tax Reform on Business Contracts

Brazil’s Tax Reform is already reshaping the country’s fiscal framework. As discussions progress regarding the implementation of the Goods and Services Tax (IBS) and the Contribution on Goods and Services (CBS), companies across different industries are reassessing not only their tax structures but also the way their contracts are designed, negotiated, and executed.

This served as the starting point for the 4th Contract Governance Forum, “Tax Reform and Business Contracts: Who Is Prepared?”, hosted by BVA. The event brought together clients and guests for a practical and strategic discussion led by partners Gustavo Quedevez, from the Corporate practice, and Flávio Yoshida, from the Tax practice.

During the event, the speakers examined the main impacts of the new tax framework on the economic dynamics of contracts, particularly regarding pricing structures, margin preservation, and the allocation of responsibilities throughout supply chains.

The transition to a value-added tax model, featuring full non-cumulativity and greater transparency in tax incidence, is expected to significantly affect the economic and financial balance originally agreed upon by the parties. In this context, contract governance takes on an increasingly important role as a tool for anticipating and managing risks.

Our specialists highlighted that business contracts will need to incorporate more robust mechanisms to address the uncertainties and adjustments arising from the reform. These include economic-financial rebalancing clauses, specific tax adaptation provisions, clear rules governing the allocation and pass-through of taxes, and cooperation mechanisms designed to enable the proper use of tax credits.

The discussion also emphasized the importance of integrating legal, tax, and finance teams in the contract review process, reinforcing a multidisciplinary approach to navigating the complexities of the new system. More than a simple compliance exercise, Brazil’s Tax Reform requires a strategic reassessment of contractual foundations, with direct implications for legal certainty and the sustainability of commercial relationships.

About the Contract Governance Forum

Dedicated to topics that shape and influence corporate governance, the Forum reinforces our commitment to fostering meaningful discussions and providing practical insights on issues that directly impact the business environment in Brazil.