Impacts of the tax reform on vehicle dealerships: challenges of the transition to IBS/CBS

doi:10.22167/2675-6528-202602803

Tax Management

September 30, 2026

Impacts of the tax reform on vehicle dealerships: challenges of the transition to IBS/CBS

Impacts of Tax Reform on Vehicle Dealerships: Challenges of Transitioning to Ibs/cbs

Dailson Silva dos Santos; Regiane Vieira Wochler

DOI: 10.22167/2675-6528-202602803

Article derived from a Final Course Work (TCC), with content based on the student’s original work and adapted to the editorial format of the E&S Magazine with the support of the ResumeAI tool, an artificial intelligence solution developed by the Pecege Institute for textual synthesis and organization.

Abstract

Considering the complexity of the Brazilian tax system and the changes brought about by the Tax Reform, the research analyzed the practical and financial impacts of Constitutional Amendment No. 132/2023 and Complementary Law No. 214/2025 on the vehicle dealerships sector, notably regarding the transition from the tax substitution and single-phase regimes to the new IBS and CBS taxation model. The study was developed through an empirical case study, with a qualitative and quantitative approach, using fiscal, accounting, and managerial data from a vehicle dealership in the State of Tocantins, with a branch in the State of Goiás, for the period from January to November 2025. Data from EFD ICMS/IPI, SPED Contribuições, XML files of invoices, managerial reports, and the balance sheet were used, processed with the aid of specialized tools. The results showed that 86% of acquisitions for resale were subject to ICMS-ST and 60% to the single-phase PIS and COFINS regime, evidencing anticipation of financial burden and credit restriction. In a sensitivity analysis with three scenarios, the Selective Tax increased the cost of new vehicles by up to 21.01% and compressed the margin by up to 1.67 percentage points. In the used vehicle segment, profitability was conditioned by the origin of acquisitions and inventory turnover, with a reduction in tax burden and a 7.6% increase in gross profit. The study highlighted the strategic relevance of presumptive credit on opening inventory and the reassessment of the relationship with suppliers opting for Simples Nacional. The applicability of the results was confirmed by the studied institution, which established an internal management committee for Tax Reform, with integrated action between the accounting, tax, commercial, purchasing, and information technology areas.

Keywords: Vehicle dealerships; Presumed credits; Selective Tax; Operating margin; Tax Reform.

1. Introduction

The Brazilian tax system is widely recognized for its complexity, characterized by a high tax burden and a multiplicity of special calculation regimes, which Becker (2018) describes as a “tax carnival.” This complexity imposes high compliance costs on the automotive sector and directly affects its competitiveness, as pointed out by the National Association of Automotive Vehicle Manufacturers (Anfavea, 2024). The economic relevance of this sector is undeniable, representing approximately 20% of the industrial Gross Domestic Product and generating about R$ 107 billion in direct taxes in 2023 alone, according to data from Anfavea (2025).

In this context, vehicle dealerships operate under specific tax regimes that significantly impact them. The tax substitution of the Tax on Operations related to the Circulation of Goods and Services (ICMS-ST) and the concentrated (single-phase) taxation of the Social Integration Program Contribution (PIS) and the Contribution for the Financing of Social Security (COFINS) concentrate tax incidence in the initial stages of the production chain. As Paulsen (2022) explains, this concentration transfers the economic burden of the tax to the dealerships, without, however, granting them the right to utilize tax credits in subsequent operations. Such a system restricts credit management, affects cash flow and pricing, resulting in a business model with low operating margins due to the anticipation of collection and the absence of crediting.

However, this scenario is undergoing a profound transformation with the implementation of the consumption tax reform, established by Constitutional Amendment No. 132/2023 and Complementary Law No. 214/2025. This new model proposes the gradual replacement of taxes such as ICMS, ISS, PIS, and COFINS with the Tax on Goods and Services (IBS) and the Contribution on Goods and Services (CBS). The promise is a system based on full non-cumulativeness and destination taxation, aiming for greater economic neutrality and simplification, as explained by Machado Segundo (2025). The transition, however, will be gradual, extending until 2033, with the coexistence of old and new taxes, except for PIS and COFINS, which will be extinguished in 2026.

For vehicle dealerships, this transition imposes the need for restructuring internal controls, reviewing processes, reorganizing inventory management, and adapting to the new logic of utilizing tax credits. Furthermore, it requires a strategic review of pricing policy in various departments. Challenges arise in the production and supply chain, especially concerning suppliers classified under Simples Nacional, factors that can directly impact the competitiveness and final price of the goods or services traded.

The significant economic and revenue relevance of the automotive sector, combined with the profound structural changes brought about by tax reform, justifies the attention given to its impacts. The absence of relevant studies specifically focused on the vehicle dealerships sector during this transition period highlights a gap in the literature and practice. Given this scenario, this study aims to analyze the practical and financial impacts of the Tax Reform promoted by Constitutional Amendment No. 132/2023 and Complementary Law No. 214/2025 on the vehicle dealerships sector, particularly regarding the transition from the tax substitution and single-phase regimes to the new IBS and CBS taxation model.

2. Material and Methods

The research was developed with an applied character, adopting a mixed methodological approach, which integrated qualitative and quantitative elements. The study was characterized as an empirical case study, with the objective of analyzing the practical and financial impacts of the Tax Reform, instituted by Constitutional Amendment No. 132/2023 and Complementary Law No. 214/2025, on the vehicle dealerships sector, focusing on the transition to the new taxation model of the IBS and the CBS.

The unit of analysis consisted of a vehicle dealership, the parent company of an economic group located in the State of Tocantins, with a branch in the State of Goiás. The branch’s data were analyzed jointly with those of the parent company, due to the centralization of tax, accounting, and managerial reporting, which allowed for a reflection of the consolidated economic and tax reality of the business group. The collection of quantitative data covered the period from January to November 2025, preceding the transition phase of the Tax Reform.

For data collection, the Digital Tax Escrituração of ICMS and IPI (EFD ICMS/IPI), XML files of electronic invoices for entry and exit, and the Digital Tax Escrituração of Contributions (SPED Contribuições) were used. Internal management reports, related to the anticipation of ICMS-ST and single-phase PIS/COFINS, and the consolidated balance sheet were also employed to identify stock balances.

Prior to the analysis, the EFD ICMS/IPI, SPED Contribuições, and XML files were converted, standardized, and unified into a single database using the specialized software “Sped Advisor Verot”. The data was then consolidated into an Excel file, standardizing fields such as NCM and CFOP to ensure consistency and comparability.

The analytical treatment was carried out through filters, classifications, and segmentations in spreadsheets, analyzing records C100 and C170 of the EFD ICMS/IPI. Goods acquired for resale subject to the ICMS tax substitution regime and the PIS and COFINS single-phase regime were segregated, calculating the total gross revenue and the proportion of goods sold under these regimes.

For the analysis of the Selective Tax, the premise was adopted that certain goods would be subject to this tax starting January 1, 2027. The acquisition value of potentially subject vehicles was used, excluding extinct taxes, to obtain the net value of the product. Three distinct rates were applied to this amount for sensitivity analysis: 26.5% (high impact), 15% (intermediate), and 4.54% (conservative). Specific equations measured the effects on the final price, gross profit, effective “markup”, and operational margin compression.

The identification and classification of the company’s suppliers were carried out, grouping them into categories (Simples Nacional and other regimes). The objective was to measure the representativeness of acquisitions from suppliers classified under Simples Nacional and map their relevance in the supply chain, considering the influence of supplier taxation on appropriable credit and final cost. To measure the effect of the supplier’s tax profile on the acquisition cost, the concept of net credit cost was adopted, which allowed determining the minimum discount necessary to equate proposals from suppliers with different taxation regimes.

The consolidated balance sheet was used to identify the recorded inventory balances. A proportion of 60% of goods acquired under the single-phase PIS and COFINS regime was applied to the inventory account balance. On this amount, the IBS (0.1%) and CBS (0.9%) rates were applied to project the presumed credits of the respective value-added tax, as provided for in Complementary Law No. 214/2025. The proportion of used vehicle revenues in relation to new vehicle revenues was also identified, and information was cross-referenced to verify the proportion of operations destined for other federative units.

The qualitative analysis was developed from the critical interpretation of the results obtained in the quantitative stage, especially those arising from the cross-referencing of the company’s fiscal, accounting, and managerial data. The objective was to contextualize the numerical findings, seeking to understand their effects from the perspective of tax management, operational organization, and the company’s strategic decision-making in light of the implementation of the Tax Reform.

3. Results and Discussion

The analysis of the fiscal, accounting, and managerial data of the vehicle dealership, referring to the period from January to November 2025, revealed a complex and burdensome tax scenario, characterized by the predominance of advance payment regimes for financial burdens and credit restriction. Initial findings confirmed the premise that the Tax Reform, although associated with simplification, imposes a significant strategic and operational restructuring. This initial diagnosis is crucial for understanding the basis upon which the impacts of the transition to the Tax on Goods and Services (IBS) and the Contribution on Goods and Services (CBS) will manifest, aligning with Becker’s (2018) view on the complexity of the Brazilian tax system.

The intersection of fiscal documents and management reports of the analyzed company demonstrated that 86% of acquisitions of goods for resale in the year 2025 were impacted by the ICMS tax substitution regime (ICMS-ST). This incidence demanded a considerable cash sacrifice from the dealership due to the anticipation of state tax collection. Additionally, 60% of all goods acquired for resale in the same period were subject to the concentrated PIS rate (2.3%) and COFINS (10.80%), as provided for in Law No. 10.485/2004, which also negatively influenced the company’s cash flow. These percentages underscore the magnitude of tax anticipation and the consequent restriction of credit, characteristics that Paulsen (2022) describes as transferring the economic burden to dealerships.

The results observed in fiscal year 2025 support the premise that the Tax Reform, by proposing a restructuring of the national tax system with the aim of mitigating the harmful effects of cumulative taxation, has a direct impact on companies whose operational profile has historically been conditioned by the anticipation of taxes. The transition to the new tax model, therefore, requires a restructuring of internal processes, a reclassification of operations, and an in-depth review of commercial strategies in each business niche of the dealership. The relevance of this data lies in demonstrating the current situation as a starting point for evaluating future impacts.

Projections and simulated scenarios for the tax reform transition period

Subsequent analyses focused on simulated results, applying the methodological premises to the 2025 exercise database. It is crucial to emphasize that these values do not correspond to operations actually performed, but rather to projections aimed at anticipating the impacts of the Tax Reform. The methodology employed, especially regarding the Selective Tax rate, which still lacks legal definition, used a sensitivity analysis with different scenarios to prevent the projections from being conditioned to a single premise, ensuring greater robustness to the estimates.

Impacts of the tax reform on the new vehicle segment: selective tax [IS]

One of the main points of attention identified in the new vehicle segment of the analyzed dealership is related to the incidence of the Selective Tax (IS), as provided for in Complementary Law No. 214/2025. This tax, which is single-stage in nature, does not generate the right to credit appropriation by the buyer, which, according to CPC 16, implies that its value tends to be part of the acquisition cost of new vehicles. Consequently, the IS directly impacts the pricing structure practiced by the company, increasing the final cost of the product to the consumer.

To illustrate this impact, a specific vehicle was analyzed, the S10 model, purchased in 2025 for R$ 257,780.20. It was projected that, starting in 2027, after the exclusion of taxes abolished or reduced during the transition period (own ICMS, ICMS-ST, IPI, PIS, and COFINS), the tax base for the Selective Tax would be R$ 246,590.36. Applying the 26.5% rate of the Selective Tax, corresponding to the high impact scenario, the tax amount would be R$ 65,346.45, raising the projected acquisition cost to R$ 311,936.81 in the fiscal year 2027. This increase represents an approximate 21.01% rise in the acquisition cost compared to the 2025 value.

The projected variation in the cost of acquiring new vehicles from 2027 onwards suggests a need to reconfigure the company’s business model. The change in cost structure may influence the company’s decision-making process, requiring strategic assessments regarding the maintenance, expansion, or reorganization of its activities in the short and medium term. This conclusion corroborates the position of Anfavea (2025b), which warned about the risk of increased tax burden on vehicles from 2027 onwards, which could make the final product more expensive and pressure the margins of the entire distribution chain.

The analysis of the vehicle’s price formation to the final consumer and the company’s operating margin reinforces the concern. In the current scenario, with an acquisition value of R$ 257,780.20 and a “markup” of 11.83%, the estimated selling price is R$ 288,275.60, generating a gross profit of R$ 30,495.40. However, in the scenario projected for 2027, with the acquisition cost increased to R$ 311,936.81 due to the Selective Tax, and maintaining the same nominal gross profit of R$ 30,495.40, the final price to the consumer would be approximately R$ 342,432.21. This implies that the effective “markup” of the operation, calculated on the final price, would be reduced to 8.91%, showing a compression of the operating margin by 1.67 percentage points compared to the original margin of 10.58%.

This margin compression, if not adjusted, can lead to losses in the new vehicle segment, according to the company’s general costing logic. Bruni and Famá (2019) explain that the “markup” aims to cover expenses not considered in direct costs, such as sales taxes and administrative expenses. The data also align with the conclusions of Afonso et al. (2023) and Pestana (2024), who indicated an exponential increase in costs for various sectors of the Brazilian economy due to the new taxation, including the Automotive and motorcycle repair and trade sector, with a percentage variation of 1438.0% in the sectoral burden.

The sensitivity analysis of the Selective Tax rate revealed that the impact on the company’s cost structure is not uniform. In the conservative scenario, with a rate of 4.54%, the vehicle acquisition cost remains practically unchanged, as the new incidence is offset by the extinction of the suppressed taxes. This percentage represents the neutrality threshold. Above it, each additional percentage point of the ST rate translates into an increase in cost and a compression of the operating margin. In the intermediate scenario (15%), the acquisition cost rises by 10.01%, and the margin is compressed by 0.87 percentage points. In the high-impact scenario (26.5%), the cost increase reaches 21.01%, and the margin is compressed by 1.67 percentage points. The magnitude of the impact is directly proportional to the adopted rate, requiring a recomposition of the pricing policy to avoid compromising the segment’s result.

Impacts of the Tax Reform on the used vehicle segment

The projected increases in the cost and final price of new vehicles suggest changes in the price structure and margin of the used vehicle segment. This segment already accounts for approximately 25% of the company’s total revenue, divided between sales of new and used vehicles, and services. This economic representativeness gives the used vehicle segment strategic relevance for analyzing the potential effects of the Tax Reform and for reorganizing the dealership’s activities and business strategies.

The projected increase in the cost and final price of new vehicles indicates that the used vehicle segment may gain greater financial attractiveness, influencing consumption patterns from 2027 onwards. This market dynamic confers strategic relevance to the used vehicle segment, which has the potential to play a complementary role in inventory management and dealership revenue composition. The observation of this segment is, therefore, crucial for understanding the possible operational and commercial adjustments arising from the transition to the new tax model.

In the current tax system, the acquisition of used vehicles from individuals presents significant limitations in credit offsetting. There is no right to deduct ICMS, PIS, and COFINS credits upon entry, while upon exit, ICMS is levied on the total transaction value, and PIS and COFINS are levied on the aggregated margin. This structure results in a relatively burdensome operation, characterized by the absence of tax credits, which affects the segment’s profitability. The complexity and lack of tax neutrality are aspects that the reform seeks to address, as pointed out by Machado Segundo (2025).

With the new taxation model coming into effect from 2027, a relevant change is observed in this scenario. Complementary Law No. 214/2025 allows the acquisition of used vehicles, when made from individuals or microentrepreneurs (MEI), to enable the appropriation of presumed credits of IBS and CBS. This change represents an opportunity to reduce the tax burden and potentially increase the profitability of the used vehicle segment, provided that certain conditions are met.

To illustrate the practical application of this methodology, a used vehicle purchase and sale operation was analyzed. A vehicle acquired for R$ 64,000.00 and sold for R$ 80,000.00, generating a gross margin of R$ 16,000.00. Under the current system, the incidence of ICMS, PIS, and COFINS would result in a total tax of R$ 1,385.00, with a net gross profit of R$ 14,616.00. In the projected scenario from 2027 onwards, with the appropriation of presumed credits of IBS (0.1%) and CBS (0.9%) on acquisition from an individual, the total taxes incident on the exemplary operation is reduced to R$ 960.00, resulting in a gross profit of R$ 15,040.00. This variation represents an approximate increase of 7.6% in the operation’s result, equivalent to an additional gain of R$ 424.00 in the new model.

However, the conversion of this reduction in tax burden into effective profitability depends on the simultaneous fulfillment of specific tax, commercial, and financial conditions. From a tax perspective, the appropriation of the presumed IBS and CBS credit assumes that the acquisition is made from an individual or MEI, and does not apply to acquisitions from reseller legal entities. Furthermore, it requires documentary proof of the origin of the good and segregated accounting of operations. At the federal level, the sale of used vehicles acquired for resale allows for the calculation of IRPJ and CSLL on the difference between the sale and acquisition value, by analogy to a consignment operation, which increases the profitability differential, provided that the regularity of accounting is preserved, according to Law No. 9.716/1998.

From a commercial standpoint, the segment’s profitability is a function of inventory turnover, the conversion rate of trade-in vehicles, discipline in the appraisal process of the asset upon entry, and the reconditioning cost before resale. These elements are not altered by legislation and remain under the company’s management. Financially, the acquisition of used vehicles is funded with own working capital, unlike new vehicles, which utilize credit lines from manufacturers. The cost of carrying inventory falls entirely on the dealership, and a prolonged period of vehicle inventory can neutralize the tax gain achieved. In summary, the used vehicle segment tends to be more profitable when acquisitions originate from individuals or MEI with regular documentation, generating credit.

Impacts of the Tax Reform on the dealership’s inventory: end of PIS and single-phase COFINS

The Tax Reform will also produce immediate impacts on the dealership’s inventory. Approximately 60% of acquisitions of goods intended for resale were subject, at the time of acquisition, to the single-phase PIS and COFINS regime. Complementary Law No. 214/2025 establishes that inventories regularly registered in accounting and tax records, composed of goods acquired under the single-phase PIS and COFINS regime in the year 2026, will generate the right to the appropriation of presumed credit, calculated by applying the rate of 9.25% to the portion of the inventory corresponding to goods subject to the single-phase regime, as provided for in art. 381 of the aforementioned law.

For the projection of this benefit, it was considered that 60% of the amounts recorded in the company’s balance sheet were acquired under the single-phase regime of PIS and COFINS. On this amount, the rate of 9.25% was applied to measure the presumed credit to be recognized. The inventory accounts related to the sale of new vehicles, commercial vehicles, parts, tires, tubes, and accessories were identified. For example, for new automobiles with an accounting balance of R$ 4,823,247.85, 60% of this amount (R$ 2,893,948.71) would be eligible for the presumed credit, resulting in R$ 267,690.26 of credit to be recognized. For new commercial vehicles, with a balance of R$ 12,419,027.92, the presumed credit would be R$ 689,256.05. Parts, tires and tubes, and accessories would also generate credits of R$ 96,259.88, R$ 408.32, and R$ 8,872.96, respectively.

The possibility of appropriation of presumed credits linked to the opening inventory represents a relevant element in the analysis of the impacts of the Tax Reform and a strategic guideline for the company. The increase in the unit value of new vehicles, resulting from the incidence of the Selective Tax from 2027 onwards, tends to negatively influence consumption decisions. In this context, maintaining a significant inventory of new vehicles acquired in 2026, a period in which there is no incidence of the ST, may confer a competitive advantage to the company in 2027, allowing the offer of vehicles at prices relatively lower than those practiced by the market, without prejudice to the operational margin.

The decision to carry inventory until fiscal year 2027 involves a trade-off between the benefit of a 9.25% presumed credit on the single-phase portion of the inventory and the competitive advantage of holding vehicles acquired without the incidence of the Selective Tax. On the other hand, the carrying cost, which includes the financial cost of the credit line, the depreciation due to the change in model year, and the risk of asset obsolescence, may negatively impact the decision. The analysis suggests that selling throughout 2026 is the dominant decision for most of the inventory, reserving the deliberate holding of inventory for units acquired in the last quarter of that fiscal year and for models with lower turnover and higher unit margin.

Impacts of the Tax Reform on credit and the relationship with suppliers opting for the Simples Nacional

The transition from a tax system based on cumulativeness and the mitigation of tax credit utilization to a full non-cumulativeness model gives greater strategic relevance to the company’s purchasing sector. The cross-referencing of tax data revealed that approximately 20% of the acquisitions of the studied company are made from suppliers classified under the Simples Nacional regime. Although this characteristic was not relevant for credit utilization under the previous system, in the context of the Tax Reform, the supplier’s taxation method directly influences the extent of credit that can be claimed by the buyer, impacting the final value of the good or service.

This dynamic corroborates the conclusions of Macedo and Monteiro (2024), who observed that opting to collect the IBS and CBS within the Simples Nacional may lead to a disruption in the production chain. Acquiring companies tend to prefer suppliers that allow for greater credit transfer, affecting the competitive position of companies opting for the simplified regime. Complementary Law No. 214/2025 establishes that, when the payment of IBS and CBS is made through the Simples Nacional without the supplier opting for the regular tax assessment regime, the amount of credit that can be claimed by the acquirer is limited to the amounts effectively collected under this regime.

This limitation may result in a residual tax cost incorporated into the final product price, affecting the system’s neutrality and making the product more expensive. The data interpretation suggests that this dynamic impacts the formation of the cost of acquired goods, cash flow, and potentially the competitiveness of products marketed by the analyzed company, especially under the logic of full crediting of the new model. Macedo and Monteiro (2024) also point out that companies under Simples Nacional that maintain the collection of IBS and CBS within the unified regime will transfer credit at a significantly lower level than under the general regime, estimated at around 7%, in contrast to the full amount estimated at 26.5%, which, in practice, implies a break in the crediting chain and burdens the buyer who cannot fully offset the tax paid in previous stages.

From this analytical perspective, the Tax Reform introduces an environment where the supply chain becomes a relevant factor in the efficiency of credit offsetting and price formation. This demands greater attention to the integration between purchasing, tax, and financial processes, reinforcing the importance of understanding, systemically, the impacts of the new model not only on sales operations but also on the earlier stages of the economic chain. Identifying the economic relevance of Simples Nacional suppliers and the eventual option for the regular calculation regime of IBS and CBS are strategic elements for understanding the effects of the new system on the supply chain and the company’s ability to utilize credits.

The practical applicability of the results was confirmed by the studied institution, which established an internal Tax Reform management committee, with integrated action between the accounting, fiscal, commercial, purchasing, and information technology areas. This committee aims to monitor the transition, establish fiscal compliance rules, mitigate the effects of the reform, and commercially position the company in the new tax scenario. The relevance of these findings for business management in the sector is attested by the replication of the committee in another 26 dealerships, located in the North, Northeast, and Center-West regions of Brazil, covering multiple brands.

In summary, the research demonstrated that the Tax Reform imposes asymmetric challenges and opportunities for the dealership segments. The Selective Tax significantly raises the cost of new vehicles and compresses margins, while the used vehicle segment may benefit from the appropriation of presumed credits, provided specific acquisition and management conditions are met. The possibility of presumed credit on the opening inventory and the reevaluation of the relationship with Simples Nacional suppliers emerge as crucial strategic factors for preserving the dealership’s profitability and competitiveness during the transition period, directly responding to the objective of analyzing the practical and financial impacts of the reform.