On March 1st, 2021, Congressman Filipe Barros presented the Bill of Law #640/2021, which introduces the Contribution of Intervention in the Economy over digital services (CIDE-Internet). If introduced, CIDE-Internet shall mainly affect companies (national and multinational) operating in the digital services sector, levying over the gross revenue amounts earned in relation to the activities of:
- Advertising, sponsorship or merchandising;
- Content targeting;
- Collection, distribution or treatment of users’ data;
- Incentive or influence for the use of services;
- Payment platform; and
- Exploitation or dissemination of image, text, video or sound related to a natural or legal person.
Pursuant to Bill of Law #640/2021, the CIDE-Internet will levy at a rate of 3% over the gross revenue accrued in the activities listed above when perceived in Brazil, even if earned by a foreign company.
CIDE-Internet’s taxpayers will be the legal entities which in consequence of exploration of the aforementioned activities in Brazil accrued revenue in the country or abroad.
Bill of Law #640/2021 is still in the initial stages of discussion in the House of Representatives, will have to be debated in Congress and will have to complete various steps before being approved and published as a law.
Please note that there is no average time for the approval of a Bill of Law in Brazil - it could take from a few months to many years. The political moment, the public interest and even the popularity of the Bill of Law are a few of the factors that may influence its approval’s timing.
For more information, contact a tax professional with KPMG Brazil:
Carlos Eduardo Toro