Starting from 2026, Brazil will implement a historic tax reform, introducing two new indirect taxes that will modernize your tax system. This change will bring the Contribution on Goods and Services (CBS) to 8,8%, a federal tax, and the Goods and Services Tax (GST) of 17,7%, of state and municipal scope. Both will function similarly to the Value Added Tax (VAT), aligning Brazil with the best international practices.
A crucial aspect of this reform is the taxation of non-resident digital service providers. This measure aims to equalize the competition between foreign and national companies, 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 scenario. 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 indicates that 59,2% of users between 16 and 64 years old make online purchases weekly. Furthermore, the country leads in time spent online on activities such as gaming, social media and content streaming.
Regulatory Framework and Compliance
The Brazilian regulatory environment for digital commerce is evolving consistently, although the 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, combat to cyber crimes and consumer protection.
Companies operating in the Brazilian market must be attentive to consumer expectations, that 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 US$ 8 trillion by 2027, an expressive growth compared to US$ 2,3 trillion registered in 2017
In Latin America, online sales are expected to reach US$ 160 billion by 2025, with Brazil, Mexico and Argentina representing 67,06% of this market in 2024. This expansion scenario has driven mergers and acquisitions in the sector, in addition to 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 fees and taxes. This initiative will not only benefit companies, but also the 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 the economic modernization of Brazil. National and international companies must prepare to adapt their operations to this new scenario, that promises to create a more equitable and dynamic business environment in the country.
