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| COFINS-Digital - Bill of Law #131/2020 |
On May 22, 2020, Senator Zenaide Maia presented the Bill of Law #131/2020, which changes Law #10,833/2003 to introduce a special taxation regime regarding COFINS applicable to legal entities of the digital services sector (COFINS-Digital).
If approved, COFINS-Digital shall mainly affect multinational companies operating in the digital services sector and shall levy over the gross revenue amounts earned in relation to the activities of:
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Availability of a digital platform / interface that allows users to interact with the objective of selling and delivering goods or providing services; and |
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Provision of digital services to advertisers or their agents, with the objective of placing targeted advertising messages on digital platform based on data related to the user (e.g. personal advertisement based on the search history of the user). |
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Pursuant to Bill of Law #131/2020, COFINS-Digital shall levy at a rate of 10,6% over the revenues related to the taxable events above. Note that Brazilian resident legal entities are already subject to COFINS taxation and such COFINS-Digital rate represents an increase of 3 percentual points in the regular COFINS rate applicable under the non-cumulative regime of PIS/COFINS.
Revenues arising from activities not related with the taxable events described above would continue to be taxed by regular COFINS rate of 7,6% (under non-cumulative regime).
COFINS-Digital’s taxpayers will be legal entities, regardless of the location of their establishment, which cumulatively recognizes monthly revenues: (a) greater than USD 20 million (or the equivalent in another currency) globally (USD 240 million/year); and (b) greater than BRL 6,5 million in Brazil (BRL 78 million year).
Currently, Bill of Law #131/2020 is under evaluation in the Senate Plenary and will be submitted to all legal procedures 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 the its approval’s timing.
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camilabacellar@kpmg.com.br |
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