27 May 2026
During April 2026, Brazil gazetted Decree No. 12,955/2026, confirming key details of the new federal CBS (Contribuição sobre Bens e Serviços) tax on digital services, including that no registration threshold will apply to non-resident businesses.
Last year, Brazil confirmed that from August 2026 it would introduce two new indirect taxes to replace its existing system. These taxes will operate in a similar way to VAT:
- CBS (8.8%) – a federal consumption tax (Contribuição sobre Bens e Serviços)
- IBS (17.7%) – a state and municipal consumption tax (Imposto sobre Bens e Serviços)
As part of the reform, non-resident providers of digital services will be brought within scope and, in most cases, required to register, collect, and remit these taxes on supplies made to consumers in Brazil. For business-to-business supplies, a reverse charge mechanism is expected to apply in many cases.
Currently, foreign businesses providing digital services in Brazil are generally not required to charge indirect taxes on their sales, creating an imbalance between non-resident and domestic providers. The new rules are intended to help level the playing field.
The new taxes are expected to apply to a wide range of electronic services, including online advertising, streaming of games, music and films, apps, e-books, e-journals, software, and internet services.
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