Brazil Ushers in New Digital VAT Regime, Impacting Foreign SaaS, Streaming Providers
SÃO PAULO – A sweeping tax reform in Brazil will compel non-resident digital service and goods suppliers, including those offering SaaS, streaming, and marketplace services, to register for and comply with the new Contribution on Goods and Services (CBS) and Tax on Services (IBS) starting in 2026. The phased implementation, culminating in full transition by 2033, marks a notable shift, bringing foreign entities into Brazil’s value-added tax (VAT)-style system and modernizing its indirect tax landscape.
The reform consolidates existing taxes into the dual CBS/IBS model. While CBS applies to defined categories of goods, IBS covers services. Currently, CBS/IBS rates will be applied without payment in 2026, with collection beginning in 2027. The transition is structured with IBS phasing in through 2032, and complete implementation scheduled for 2033. This overhaul also necessitates updates to existing electronic invoicing layouts (NF-e and NFS-e) to accommodate CBS/IBS fields, alongside the advancement of a national NFS-e model for services and anticipated updates to the SPED schema.
A key element of the new framework addresses responsibility for tax collection. Platforms facilitating transactions may be held liable for CBS/IBS, and if both the supplier and the platform fail to register, financial institutions processing remittances may be required to withhold the tax. This means digital goods and services supplied to Brazil-based customers are explicitly within the scope of the new regulations.
Foreign suppliers are advised to proactively prepare for registration, review contractual liabilities with platforms, adjust pricing and Enterprise Resource Planning (ERP) systems to account for CBS/IBS, and ensure e-invoicing systems are updated to handle the new CBS/IBS fields.
“We continue to monitor Brazil’s tax reform developments closely,” states Global VAT Compliance (GVC). “If you have questions about your obligations under the new CBS/IBS framework or need support preparing your digital services for the upcoming transition, our team is available to assist.”
