Brazil: Review of digital services tax proposals

Brazil: Review of digital services tax proposals

There are currently five separate bills (pending consideration in Brazil’s Chamber of Deputies and Senate) that include proposals to introduce some form of a digital services tax in Brazil.

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The measures in these bills are briefly summarized below.


KPMG observation

Certain measures in these five bills are similar, and given these similarities, some observers expect that the Congress could evaluate the bills together in order to reach consensus on a preferred approach. At the end, the measures might be merged into one bill or simply disregarded if there is a preference for the tax treatment offered by a particular bill.

Overview of bills proposing digital services tax


CIDE-Digital (PLP #2,358/2020)
introduced 4 May 2020, would impose tax at a rate ranging from 1% to 5% (depending on the amount of gross revenue) on gross revenue from:
  • Advertising provided to Brazilian users
  • The availability of a digital platform that allows for interactions with the objective of selling goods or providing services directly between users when one of the users is located in Brazil
  • Transfers of data from users located in Brazil

Entities that could be affected by this tax would include legal entities (both residents of Brazil and foreign entities) that belong to an economic group that in the previous calendar year had: (1) BRL 3 billion of global gross revenue; or (2) BRL 100 million gross revenue in Brazil.


COFINS-Digital (PL #131/2020)
introduced 22 May 2020, would impose a three percentage point increase to the rate of COFINS* on gross revenue from:

  • The availability of a digital platform or interface for the sale of goods and services
  • The provision of digital services to advertisers or their agents

Entities subject to this tax would be legal entities (both residents of Brazil and foreign entities) that cumulatively recognize monthly revenues: (1) greater than U.S. $ 20 million (or the equivalent in another currency) globally (that is, U.S. $240 million annually); and (2) greater than BRL 6.5 million in Brazil (or BRL 78 million annually).

*COFINS (contribuição para o financiamento da seguridade social) refers to a social contribution program for social security financing.



CSSD (PLP #218/2020)
introduced 19 August 2020, would impose tax at a rate of 3% on gross revenue from:

  • Online advertising that targets users in Brazil
  • Digital platforms that allow users to contact and interact with others for the purpose of selling goods or providing services directly between each other, provided that one of the users is located in Brazil
  • The transmission of data from users located in Brazil that was generated by such users or collected while they were using the digital platforms

Entities subject to this tax would be legal entities (both residents in Brazil and foreign entities) that belong to an economic group with global gross revenues, in the previous calendar year, greater than BRL 4.5 billion.


CSESD (PLP #241/2020)
introduced 24 September 2020 would impose tax at a rate of 3% (but a rate of 10% on revenue related to electronic betting) from:

  • Streaming or download of digital content
  • Online games, apps and software (as well as upgrades)
  • Electronical apps that allow economic transactions or transactions of any digital contents between users
  • Betting commercialized through electronic channels

Entities subject to this tax would be legal entities (both residents in Brazil and foreign entities) that have gross revenues, in the prior calendar year, greater than BRL 100 million.


CIDE-Internet (640/2021)
introduced 1 March 2021 would impose tax at a rate of 3% on gross revenue from:

  • Advertising, sponsorship or merchandising
  • Content targeting
  • Collection, distribution or treatment of users’ data
  • Incentive or influence for the use of services
  • Payment platform
  • Exploitation or dissemination of images, text, video or sound related to a natural or legal person

Entities subject to this tax would be legal entities which, as a consequence of exportation of the listed activities in Brazil, accrued revenue in Brazil or abroad.


For more information, contact a KPMG tax professional:

Carlos Eduardo Toro | +55 11 9699 81618 | ctoro@kpmg.com.br

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