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Brazil: ICMS imposed on electronic commerce, digital goods (São Paulo)

Brazil: ICMS imposed on electronic commerce

New guidance concerns the imposition of ICMS on electronic commerce and with respect to sales of digital goods in the Brazilian state of São Paulo.


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The ICMS—Imposto sobre Circulação de Mercadorias e Serviços—is typically noted to be a state-level sales tax imposed on the physical movement of merchandise. The ICMS is also levied on certain inter-state and inter-municipal services.

Portaria CAT Ordinance No. 24 of 2018 (23 March 2018) implements changes that were introduced by Decree 63.099 in late December 2017. There are new rules for determining that website owners and electronic platforms involved in the transfer of software, programs, electronic games, applications and electronic files will be subject to the payment of ICMS. The tax liability is imposed, for example, on:

  • Software, programs, electronic games, applications, electronic files and similar items that are standardized (off-the-shelf), even if they have been or can be adapted, regardless of whether they are used by the purchaser by downloading or are “in the cloud”
  • Contents of audio, video, image, and text ("downloads") 

The ordinance also provides rules for reporting and filing returns with respect to these transactions, and its effective date is 1 April 2018.


Read a March 2018 report (Portuguese) prepared by the KPMG member firm in Brazil

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