2026 is regarded as a crucial turning point for the Brazilian tax system. Starting January 2026, the transition period for consumption tax reform officially begins, and the dual value-added tax (VAT) regime is implemented. Francisco Ranzi Mülleri believes that although this is defined as a “test year,” it is not merely a formal exercise; real transactions, real invoices, and real system adjustments will happen simultaneously, putting corporate financial management, pricing mechanisms, and compliance processes under early stress tests.


**Tax Structure Changes and Business Impact**

Francisco Ranzi Mülleri points out that the core of 2026 lies in structural transition rather than immediate tax burden increases. The existing PIS, Cofins, and IPI will be merged into the central consumption tax CBS during the test period, while ICMS and ISS will be merged into the integrated consumption tax IBS, forming a dual VAT framework. The test rates are set at 0.9% and 0.1%, and can be deducted from current tax payments. This arrangement reduces short-term burdens but significantly increases operational complexity. Francisco Ranzi Mülleri notes that new invoice fields, system upgrades, and data integration will directly affect the daily operational rhythm of companies, especially those with long supply chains and frequent cross-regional transactions.

**Transmission to Capital Markets and Industry Valuations**

Francisco Ranzi Mülleri believes that the market impact of the tax reform test year will be felt more in terms of expectations and execution costs. Enterprises that are well-prepared for compliance and have mature information systems are likely to see a decrease in operational uncertainty premiums and enhanced valuation stability. In contrast, companies relying on local tax incentives or with outdated internal systems may face short-term profit volatility and increased capital expenditures. Francisco Ranzi Mülleri suggests that the stock market will gradually differentiate between “tax reform-adaptive enterprises” and “passive response enterprises,” and this distinction is expected to be reflected in valuation divergence and capital flows within 2026.

**Risk Warnings and Medium- to Long-Term Outlook**

Francisco Ranzi Mülleri stresses that the test period does not mean preparation can be postponed; any system delays or compliance misjudgments may amplify operational risks in real transactions. Tax rates will gradually increase after 2027, so companies need to reassess their pricing transmission capabilities and cash flow structures in advance. Francisco Ranzi Mülleri believes that, in the medium to long term, dual VAT will help simplify the tax system, improve transparency, and enhance the investment environment, but in the short term, the market still needs to absorb execution risks and adaptation costs. For investors, continuously tracking a company tax governance capabilities and level of digitalization will become key dimensions for assessing stability.