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VAT on Digital Services in Brazil

VAT Rate on Digital ServicesVAT on Cross-Border Electronically Supplied Services Digital Reporting Requirements for Foreign Sellers Providing Electronically Supplied Services

Tax on Cross-Border Digital Services in Brazil

Brazil has not yet introduced VAT on B2C cross-border services supplied by foreign service providers to final customers (customers who are not registered for VAT in Brazil and are not identified by a valid VAT number).

The Brazilian Government had some initiatives that aimed to capture uncollected indirect taxes, e.g., introducing a new, flat-rate tax called Contribution on Goods and Services (CBS) or introducing digital ICMS on B2C transactions in the customers’ state; however, there are currently no specific rules in place to tax cross-border digital services in Brazil.

Income Withholding Tax

Payments to non-resident businesses may be subject to IRRF (Imposto de Renda Retido na Fonte), CIDE (Contribuições de Intervenção no Domínio Econômico), PIS/COFINS, and ISS, depending on the transaction’s classification.

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