By Priscila Lucenti Estevam<\/a><\/p> Brazil\u2019s Congress will review a bill that creates a new tax on digital services provided to local customers. If approved, the new tax should reach major multinational companies that offer digital services to Brazilian customers, including those without a local presence.<\/p> On May 4, 2020, lawmaker Jo\u00e3o Maia submitted to Brazil\u2019s House of Representative a law project (Project 2,358\/2020) that creates a new tax (namely Contribution of Intervention in the Economic Domain, or CIDE-Digital) on gross revenues of large tech companies that offer digital services to Brazilian customers. <\/p> The project reveals the struggle that other countries have already experienced: when it comes to the digital economy, whose business models are intangible-based, it is hard to identify the jurisdiction where value creation takes place for tax purposes. As digital businesses do not require a physical presence to create value creation, major tech companies can allocate their profits in jurisdictions with more favorable taxation as compared to those where income is generated.<\/p> Based on OECD experience, as well as other countries such as India, France, and Italy, Project 2357\/2020 intends to tax gross income arising from:<\/p> If approved, CIDE-Digital will reach companies located in Brazil or abroad<\/u><\/strong>, whose income derives from digital services, and that belongs to an economic group with the following annual gross income in the previous calendar year: <\/p> With such local and <\/strong>global gross income requirements, CIDE-Digital would affect large companies with international presence but will not apply to those entirely Brazilian.<\/p> The rate of CIDE-Digital will be progressive rates, as follows: <\/p> The project is unclear on a few issues that may make collection hard, or even impossible. For instance, it does not address how multinational companies without a physical presence in Brazil shall assess and remit the tax to the local government. <\/p> The project shall be submitted to House commissions before discussion and vote by the full House of Representatives. After that, it shall pass debate and vote in the Federal Senate.<\/p> Priscila Lucenti Estevam<\/strong><\/a>, senior tax associate of Battella, Lasmar & Silva Advogados<\/a> and co-author of Tributa\u00e7\u00e3o da Economia Digital no Brasil<\/strong><\/a><\/em>, published by Editora B18.<\/p>","protected":false},"excerpt":{"rendered":" By Priscila Lucenti Estevam Brazil\u2019s Congress will review a bill…<\/p>\n Read more<\/a><\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_uag_custom_page_level_css":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[38],"tags":[137,136,139,138,140],"class_list":{"0":"post-8537","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-articles","7":"tag-brazilian-taxation","8":"tag-priscila-lucenti-2","9":"tag-tax-guide","10":"tag-taxation-of-digital-economy","11":"tag-taxation-of-new-economy-brazil"},"aioseo_notices":[],"featured_image_urls_v2":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":"","a13_navigation_image_size":"","woocommerce_thumbnail":"","woocommerce_single":"","woocommerce_gallery_thumbnail":""},"post_excerpt_stackable_v2":" By Priscila Lucenti EstevamBrazil\u2019s Congress will review a bill that creates a new tax on digital services provided to local customers. If approved, the new tax should reach major multinational companies that offer digital services to Brazilian customers, including those without a local presence.On May 4, 2020, lawmaker Jo\u00e3o Maia submitted to Brazil\u2019s House of Representative a law project (Project 2,358\/2020) that creates a new tax (namely Contribution of Intervention in the Economic Domain, or CIDE-Digital) on gross revenues of large tech companies that offer digital services to Brazilian customers. The project reveals the struggle that other countries have already…<\/p>\n","category_list_v2":"Articles<\/a>","author_info_v2":{"name":"Editor-Chefe","url":"https:\/\/www.b18.com.br\/en\/author\/dsilvablslaw-com-br\/"},"comments_num_v2":"0 comments","jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"a13_navigation_image_size":false,"woocommerce_thumbnail":false,"woocommerce_single":false,"woocommerce_gallery_thumbnail":false},"uagb_author_info":{"display_name":"Editor-Chefe","author_link":"https:\/\/www.b18.com.br\/en\/author\/dsilvablslaw-com-br\/"},"uagb_comment_info":0,"uagb_excerpt":"By Priscila Lucenti Estevam Brazil\u2019s Congress will review a bill… Read more","_links":{"self":[{"href":"https:\/\/www.b18.com.br\/en\/wp-json\/wp\/v2\/posts\/8537"}],"collection":[{"href":"https:\/\/www.b18.com.br\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.b18.com.br\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.b18.com.br\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.b18.com.br\/en\/wp-json\/wp\/v2\/comments?post=8537"}],"version-history":[{"count":3,"href":"https:\/\/www.b18.com.br\/en\/wp-json\/wp\/v2\/posts\/8537\/revisions"}],"predecessor-version":[{"id":12324,"href":"https:\/\/www.b18.com.br\/en\/wp-json\/wp\/v2\/posts\/8537\/revisions\/12324"}],"wp:attachment":[{"href":"https:\/\/www.b18.com.br\/en\/wp-json\/wp\/v2\/media?parent=8537"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.b18.com.br\/en\/wp-json\/wp\/v2\/categories?post=8537"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.b18.com.br\/en\/wp-json\/wp\/v2\/tags?post=8537"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}