Tax Reform and Its Accounting Impacts on Movable Asset Rental Companies

Elaine Cristina Garcia Pereira; Nayara Cavinato

DOI: 10.22167/2675-6528-202602852

Article derived from a Course Conclusion 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 Instituto Pecege for textual synthesis and organization.

Summary

The Brazilian tax system was characterized by high complexity, especially for companies under the Real Profit regime, which justified the relevance of analyzing the impacts of the Tax Reform on accounting practices. The effects of the Tax Reform on the accounting practices of companies renting movable assets were analyzed, focusing on tax calculation, accounting controls, and cash flow. The research was applied in nature, with a qualitative approach and descriptive character. It was developed through documentary analysis of accounting and fiscal data, as well as a comparison between the current tax model and the proposed one. The results showed that the replacement of consumption taxes with a value-added-based model tends to reduce operational complexity, increase the utilization of tax credits, and enhance transparency in tax calculation. Significant impacts were identified in the cost structure, in the formation of accounting results, and in cash flow management, especially during the transition period. The need for adaptation of accounting systems and internal company processes was also observed. It was concluded that the Tax Reform represents a significant structural change, requiring greater organization and adaptability from companies, while also offering opportunities for improvement in accounting and tax management.

Keywords: Tax accounting; Cash flow; Real profit; Tax Reform; Taxation.

1. Introduction

The Brazilian tax system is recognized for its high complexity, a constant challenge for companies, especially those under the Lucro Real regime. In this context, tax calculation depends on accounting results adjusted by fiscal additions and exclusions, requiring a high level of control and continuous updating (Fabretti, 2021; Marion, 2019). Such complexity entails significant compliance costs and greater exposure to fiscal risks, in addition to intensifying legal uncertainty and hindering strategic planning for organizations due to the vast amount of ancillary obligations and regulatory density (Pêgas, 2017; Brazilian Institute of Planning and Taxation, 2020).

The system’s complexity is aggravated by the lack of uniformity in the interpretation of norms among federative entities, which generates uncertainties in tax incidence and contributes to the increase in tax litigation (Carvalho, 2022). Academic literature points out that tax systems with such a level of complexity tend to cause economic distortions and reduce overall efficiency. Cumulativeness, for example, raises costs along the production chain and compromises tax neutrality (Varsano, 2014), while low transparency increases companies’ operational costs (Organisation for Economic Co-operation and Development, 2021). Faced with these challenges, models based on Value Added Tax are widely considered more efficient.

In the international scenario, the adoption of systems based on the Value Added Tax has been a growing trend, aiming to promote greater neutrality and reduce tax cascading (Organisation for Economic Co-operation and Development, 2021). In Brazil, this movement culminated in the enactment of Constitutional Amendment No. 132/2023, which establishes a dual Value Added Tax, composed of the Contribution on Goods and Services and the Tax on Goods and Services. This reform seeks to replace taxes such as the Program for Social Integration, the Contribution for the Financing of Social Security, the Tax on Circulation of Goods and Services, and the Service Tax, with the purpose of simplifying and rationalizing the national tax system (Appy, 2020).

The implementation of this new tax model represents a significant structural change, which expands non-cumulativeness and credit utilization, substantially altering the dynamics of tax incidence throughout the production chain. However, this transition requires a profound adaptation of accounting systems and internal company processes to ensure compliance and efficiency in management (Marion, 2019; Appy, 2020). The magnitude of these changes imposes considerable challenges on organizations, which need to re-evaluate their operations and strategies.

From an accounting perspective, the changes directly impact the measurement of operations and the analysis of economic performance, with these effects being even more relevant for companies under the Real Profit regime, given the strong link between accounting and taxation (Brazil, 2018; Higuchi, 2021). Furthermore, the transition to the new tax system may generate significant impacts on the cash flow of organizations, demanding greater integration between the accounting, tax, and financial areas for effective planning (Assaf Neto, 2020; Pêgas, 2017).

Given this scenario of profound transformations and the challenges of adaptation and fiscal risks involved, the relevance of the present study lies in the need to understand the impacts of the Tax Reform on the accounting practices of companies renting movable assets classified under the Real Profit regime, contributing to the improvement of controls and tax management (Higuchi, 2021; Pêgas, 2017). The objective of this work is to analyze the effects of the Tax Reform on the accounting practices of companies renting movable assets taxed under Real Profit, identifying impacts on tax calculation, accounting controls, and company results.

2. Material and Methods

This study was characterized as a research of an applied nature, seeking to analyze, from a practical perspective, the impacts of the Tax Reform on the accounting practices of companies in the movable property rental sector classified under the Actual profit tax system. This type of research aims to generate knowledge aimed at solving concrete problems, contributing to decision-making in the organizational environment (Gil, 2019).

Regarding the approach, the research was classified as qualitative, as it was based on the interpretation of the changes introduced by Constitutional Amendment No. 132/2023 and its repercussions on tax assessment and company accounting. The qualitative approach proved adequate for understanding complex phenomena, especially those related to normative and institutional changes (Lakatos and Marconi, 2021; Creswell, 2014).

Regarding the objectives, the study had a descriptive character, as it sought to identify, analyze, and describe the effects of the substitution of taxes on consumption, with emphasis on the utilization of credits, the tax burden, and the impacts on companies’ results (Vergara, 2016; Gil, 2019).

Regarding the methodological procedure, a case study of a documentary nature was carried out in a medium-sized company operating in the movable asset rental sector. The organization is located in the municipality of Arujá, state of São Paulo. The research was developed in the period from July 8, 2025, to August 12, 2026, the date of submission of the work.

The analyzed company falls under the Actual profit regime, has annual total sales exceeding R$ 15 million, and operates nationally. Its main activity consists of renting hangers, used by companies in the textile and apparel sector for storing and displaying items intended for large retail chains. To preserve the confidentiality of information, the company’s identity has been omitted, and the data is used exclusively for academic purposes.

For the documentary research, accounting and tax documents and reports made available for analysis were used. The Statement of Income for the year 2025, accounting reports, accounting books, auxiliary records, and invoices were included. These documents formed the basis for the construction of scenarios and for the comparative analysis between the current tax system and the model proposed by the Tax Reform.

The research was structured in sequential steps. Initially, a survey and analysis of the current tax system was carried out, focusing on the taxes levied on the company’s operations, especially PIS and COFINS. Their rates, calculation rules, and credit criteria under the non-cumulative regime were considered (Fabretti, 2021). This stage allowed for an understanding of the current taxation structure and its accounting implications.

In the next stage, the changes introduced by the Tax Reform were analyzed, highlighting the creation of the Contribution on Goods and Services and the Tax on Goods and Services, structured under the logic of the dual Value Added Tax. This analysis considered aspects such as non-cumulativeness, tax base, crediting criteria, and impacts on the production chain, based on the literature on tax reform in Brazil (Appy, 2020).

Subsequently, a comparative analysis was performed between the current tax system and the proposed model, based on simulated scenarios constructed from the Income Statement for the year 2025. Parameters such as effective tax burden, volume of tax credits, and impact on accounting results were considered (Assaf Neto, 2020).

The calculation in the post-reform scenario considered estimated premises, especially the application of an estimated rate of around 25% for the Goods and Services Tax and Goods and Services Contribution, as well as the expansion of credit utilization, as discussed in the literature on the tax reform. Based on these premises, the impacts of the new model on the company’s results were projected.

The data analysis was conducted using a comparative and interpretive technique, allowing for the evaluation of differences between tax systems and their effects on the company’s economic-financial performance. According to Marion (2019), accounting analysis should consider not only formal records but also the economic effects of operations.

Finally, the study’s limitations included the use of data based on simulated scenarios and the absence of complete regulation of the new tax system at the time of the research, which may influence the accuracy of the analyses performed. Furthermore, as it is an analysis based on a non-probabilistic sample, the results could not be generalized to the entire sector and should be interpreted as indicative of trends (Gil, 2019).

3. Results and Discussion

The analysis of the results obtained in the research allowed for an in-depth understanding of the impacts of the Tax Reform on the accounting practices of companies renting movable assets under the Real Profit regime. Initially, an assessment of the current tax structure was carried out, focusing on consumption taxes, to then compare it with the model proposed by Constitutional Amendment No. 132/2023. The findings highlight significant transformations in tax calculation, accounting controls, and consequently, in the economic-financial results of the organizations, in line with the central objective of the study.

The research started from the analysis of the Income Statement of the studied company, for the year 2025. It was verified that the entity registered a negative operating result of R$ -4,230,499.94. This performance was mainly attributed to the high volume of expenses compared to the total gross revenue of R$ 16,536,349.92. Costs totaled R$ 4,072,704.42 and expenses reached R$ 16,694,145.44, indicating a spending structure that exceeded the operational revenue generation capacity in the analyzed period.

Under the current tax model, the company was subject to the incidence of PIS and COFINS, with rates of 1.65% and 7.60%, respectively, totaling a tax burden of R$ 1,529,612.37. This calculation reflects the complexity of the current system, characterized by a partial and restrictive non-cumulative regime. The legal basis for these taxes is established by Laws 10.637/2002 and 10.833/2003, which impose specific criteria for the utilization of credits, limiting them to inputs considered essential or relevant.

Analysis of the tax structure and credit utilization

The comparison between the current tax model and the post-reform model revealed substantial differences. In the current regime, non-cumulativeness is partial, and the criteria for crediting are restrictive, depending on the classification of essential or relevant inputs. This subjectivity in the interpretation of legislation, as pointed out by Carvalho (2019), frequently generates controversies and legal uncertainty, increasing compliance costs and the risk of tax litigation for companies.

In contrast, the model proposed by Constitutional Amendment No. 132/2023, which establishes the Tax on Goods and Services (IBS) and the Contribution on Goods and Services (CBS), adopts full non-cumulativeness. This change allows for the utilization of credits on all acquisitions linked to the company’s activity, without the restrictions imposed by the current system. The legal basis for the new model is the Constitutional Amendment itself, and regulatory complexity tends to be reduced, promoting greater transparency in tax calculation.

The transition to the dual Value Added Tax (VAT) model, composed of the IBS and the CBS, represents a significant advance in rationalizing the Brazilian tax system. Appy (2020) highlights that the adoption of this model aims to increase economic neutrality and reduce distortions along the production chain, as taxation is levied only on the value added at each stage, eliminating the cascading cumulativeness that characterizes the current system.

Comparison of credit utilization

The detailed analysis of credit utilization demonstrated an expressive expansion in the post-reform scenario. In the current model, the credit base was R$ 6,230,054.96, with a rate of 9.25%, resulting in utilized credit of R$ 576,279.58. This limitation arises from the restrictive nature of the non-cumulative PIS and COFINS, which conditions the recognition of credits to the characterization of specific inputs, as already discussed.

In the post-reform model, the projected credit base increased to R$ 20,766,849.86, with an estimated rate of 25% for the IBS and CBS set. With this new structure, the utilized credit reached R$ 5,191,712.47. This significant expansion of the base and the amount of credits is a direct consequence of the adoption of full non-cumulativeness, which allows for crediting on a much broader spectrum of acquisitions, aligning with the principles of a modern VAT.

This result corroborates the literature that advocates for VAT as a mechanism to eliminate cascading taxation and ensure that taxation effectively falls on the value added at each stage of the production chain, promoting greater economic neutrality (Carrazza, 2020). The increase in utilized credit, therefore, does not necessarily imply an increase in the tax burden, but rather a reconfiguration of the dynamics of tax incidence and offsetting.

The Institute of Applied Economic Research (IPEA, 2023) reinforces that VAT-based models tend to increase the neutrality of the tax system and reduce economic distortions. However, the practical effects can vary considerably depending on the operational structure and the profile of each company. For the movable property rental company analyzed, the change represents an advance in terms of tax rationality and transparency in tax calculation, by expanding the right to credit and mitigating cumulativeness.

Impact on the company’s bottom line

The comparison of the company’s economic result before and after the implementation of the proposed tax model revealed that the operational structure (revenues, costs, and expenses) remained unchanged, with gross revenue of R$ 16,536,349.92, costs of R$ 4,072,704.42, and expenses of R$ 16,694,145.44, resulting in the same operational loss of R$ -4,230,499.94 in both scenarios. The difference in the final result stems exclusively from the change in the taxation system.

In the post-reform scenario, the application of the Value Added Tax model, with an estimated rate of 25% on gross revenue, generated an initial tax liability. However, the appropriation of tax credits for the period, according to the VAT logic, exceeded this liability. The result was the formation of a credit balance of R$ 1,057,624.99, which eliminated the net tax burden in the analyzed period and reduced the company’s final loss from R$ -5,760,112.31 to R$ -4,702,487.32.

This credit balance indicates that, in the pure VAT model, the taxation falls exclusively on the value added along the production chain. When the structure of credits exceeds the debits of the period, a credit balance is formed, which represents an amount eligible for offset against future debits or for recovery, according to Machado (2022). This dynamic alters the form of collection and highlights the importance of efficient tax credit management.

From an economic point of view, the adoption of VAT-based systems tends to increase tax neutrality and reduce economic distortions, although its effects depend on the operational structure of companies (IPEA, 2023). Full non-cumulativeness shifts the logic of taxation from business results to consumption, minimizing economic distortions and decoupling the tax from profitability (Carvalho, 2019).

Changes in the taxation system also directly impact the cash flow of organizations, especially in scenarios with accumulated credits. The recovery of these credits can occur in a deferred manner, requiring greater financial planning and working capital management (Assaf Neto, 2020). Torres (2023) complements that the form of tax incidence and compensation directly influences the liquidity and financial management of companies, demanding a more robust integration between the accounting, tax, and financial areas.

The existence of a credit balance, therefore, is not an inconsistency of the model, but a direct consequence of the VAT offsetting structure. The Tax Reform, based on the dual VAT, seeks to reduce distortions, increase transparency, and enhance the efficiency of the tax system, promoting greater coherence between revenue collection and value added (Appy, 2020). For the analyzed company, the elimination of the net tax burden in the period represents an improvement in the bottom line, even while maintaining the operating loss.

In summary, the research results demonstrate that the Tax Reform, by replacing consumption taxes with a value-added model, tends to simplify tax assessment and reduce operational uncertainties. Full non-cumulativeness significantly expands the utilization of credits, altering the dynamics of tax incidence and offsetting. Although the company’s operational structure remains the same, the tax change positively impacts the bottom line and requires strategic adaptation of accounting systems and financial planning to manage cash flow and credit recovery.

4. Conclusion

This study analyzed the effects of the Tax Reform on the accounting practices of companies renting movable assets taxed under the Real Profit regime, focusing on tax calculation, accounting controls, and company results. It was found that the replacement of consumption taxes with a value-added-based model, such as the Tax on Goods and Services (IBS) and the Contribution on Goods and Services (CBS), tends to simplify tax calculation and reduce operational complexity. A significant increase in the utilization of tax credits was identified due to full non-cumulativeness, which altered the dynamics of tax incidence and offsetting. It was observed that, although the operational structure of the analyzed company remained unchanged, the change in the tax system resulted in the formation of a credit balance, eliminating the net tax burden in the period and positively impacting the final result by reducing the loss.

The Tax Reform represents a structural advance in simplifying the tax system and promoting greater transparency in tax calculation, offering opportunities for the improvement of accounting and tax management. However, the transition requires a profound adaptation of accounting systems and internal company processes, reinforcing the importance of tax planning and efficient credit management for financial health. As limitations, the use of simulated data and the fact that the reform is still in the regulation process, which may influence the definitive consolidation of the rules, are highlighted. Furthermore, as it is a case study, the results should be interpreted as indicative of trends, not being generalizable to the entire sector.

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Article originating from the Course Conclusion Work of the Specialization in Tax Management of the MBA USP/Esalq

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