And what many of us feared happened: last Wednesday (12/14), the Senate Brazilian approved the ISS reform (Service Tax). The project, which is a substitute for complementary law 366/2012 approved in 2015, aims to include other services in the collection of these taxes, reaching even those that provide content for streamingsuch as Netflix, Spotify, and more.
Various activities have been included by the project in the list of services that can be taxed. Among them are () data processing and programming and computers; and audio, video, image and text content on electronic pages, except for newspapers, books and journals.
Approved by 63 votes in favor and 3 against, the project requires that the above services be taxed with minimum rate of 2%. The good news is that, unlike the original proposal, no longer will be included the services of “making applications available on the electronic page and preparing computer programs, including electronic games, which would affect the prices of application stores such as the App Store, Google Play , etc., and also the development and distribution of any type of software in Brazil.
According to the publication on the Senate website, this measure is also an "attempt to end the fiscal war between municipalities"; This is because currently each municipality establishes a different rate and makes several business owners want to register their companies only where lower percentages are charged. With a minimum rate of 2% and a ban on exemption or reduction of this rate (with the right to a loss of mandate to mayors who do not comply with the law), this “fiscal war” tends to decrease.
Remember that services like Netflix are not currently completely tax exempt, you just have to go to your account where you can see the amount; however, this ISS would be collected by the municipalities and Senator Telmrio Mota (PDT-RR) already predicted that changes in the law could “guarantee an extra collection of R $ 6 billion to the municipalities”.
The project still awaits the approval of President Michel Temer, coming into force after 90 days of its publication in the Official Directory of the Union.
In summary, what this news means is that many of the services we use may increase in prices in a few months. 😢 Only internationally charged services such as Apple Music and the recently launched Amazon Prime Video are left out.
Update · 12/30/2016 s 16:14
And what we feared happened: President Michel Temer sanctioned today (12/30) the ISS change law, which will now charge a minimum rate of 2% tax on services like Netflix. Furthermore, unfortunately, it appeared at Unio Official Directory the inclusion of application stores and software creation / development (items 1.03 and 1.04).
However, not everything happened: the president vetoed that taxes were received in the municipalities where credit card purchases were made and, as a justification, said that “the devices would involve a potential loss of efficiency and tax collection, in addition to resulting in increased costs for companies in the sector, which would be passed on to the final cost, making service borrowers more expensive ”.
The rest of the conditions were maintained. The law goes into effect in 90 days.
(via Gizmodo Brasil)