Brazil’s Indirect Tax Reform Impact on Nonresidents: Key VAT Principles for Digital Economy

• Brazilian indirect tax reform proposal supports destination-based taxation and adopts key VAT principles for the digital economy
• New dual value added tax (VAT) regime introduced under the tax reform bill
• Nonresidents conducting activities in Brazil would face indirect tax compliance obligation for the first time
• Nonresident sellers conducting taxable transactions sourced to Brazil would need to register, collect, and remit new taxes
• Obligation applies to both business-to-consumer (B2C) and business-to-business (B2B) transactions
• Buyers may be jointly liable for payment of IBS/CBS on acquisition of immaterial goods and services from nonresident sellers
• Primary import IBS/CBS liability placed on importer of record for imports of tangible property
• New IBS/CBS liability introduced on transactions conducted through digital platforms, whether Brazilian or nonresident

Source: kpmg.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---