Starting in 2026, Brazil will implement a historic tax reform, introducing two new indirect taxes that will modernize its tax system. This change will introduce the Contribution on Goods and Services (CBS) of 8.8%, a federal tax, and the Goods and Services Tax (IBS) of 17.7%, at the state and municipal levels. Both will operate similarly to the Value Added Tax (VAT), aligning Brazil with international best practices.
A crucial aspect of this reform is the taxation of non-resident digital service providers. This measure aims to level the competition between foreign and domestic companies by eliminating a tax advantage that unfairly favored non-resident entities. The new tax regime will cover a wide range of electronic services, including digital advertising, content streaming, applications, software, and internet services.
Panorama of e-commerce in Brazil
The Brazilian digital market presents a robust and expanding landscape. With 207 million internet users, the country is close to the fifth stage of digital commerce development, characterized by the normalization of online sales of perishable products and the presence of multiple well-established marketplaces.
The B2B sector dominates the digital space, surpassing B2C by three times. Despite recent economic challenges, the Brazilian GDP demonstrated resilience, reaching 2.9% in 2023, with World Bank projections indicating a more moderate growth of 1.7% until the end of 2024.
The behavior of Brazilian consumers is particularly favorable to e-commerce. Data from Meltwater's 2023 Global Digital Report indicate that 59.2% of users aged 16 to 64 make online purchases weekly. Furthermore, the country leads in online time spent on activities such as gaming, social media, and content streaming.
Regulatory Framework and Compliance
The Brazilian regulatory environment for digital commerce is evolving steadily, although implementation may occur at a different pace than observed in Europe. The country has a robust legal framework, including legislation on electronic transactions, data protection, cybercrime prevention, and consumer protection.
Companies operating in the Brazilian market must be attentive to consumer expectations, who are accustomed to a high level of legal protection. Compliance with local regulations is essential for success in the market.
Growth prospects and economic impact
E-commerce has revolutionized global retail, providing brands with international reach and offering consumers unprecedented convenience. Statista projections indicate that global retail e-commerce sales are expected to exceed $8 trillion by 2027, a significant increase compared to the $2.3 trillion recorded in 2017.
In Latin America, online sales are expected to reach $160 billion by 2025, with Brazil, Mexico, and Argentina accounting for 67.06% of this market in 2024. This expansion scenario has driven mergers and acquisitions in the sector, as well as attracting significant investments to the Brazilian market.
Brazil is positioning itself as a global player in e-commerce by implementing a compliance program that promises to simplify the handling of taxes and duties. This initiative will not only benefit companies but also consumers, through the reduction of import tariffs and a more transparent approach to international transactions.
The tax reform and the new regulations for digital commerce represent a milestone in Brazil's economic modernization. Domestic and international companies must prepare to adapt their operations to this new scenario, which promises to create a more equitable and dynamic business environment in the country.
