Application of the service tax (Imposto sobre Serviços—ISS) has been extended to activities including streaming and advertising, and a standard, uniform rate of service tax has been established at 2%.
The services tax is a municipal tax (imposed at the municipal level), but general guidelines and a list of services or activities subject to the service tax are provided under federal law in Brazil.
A federal law (Lei Complementar Federal 157/2016) published in late December 2016 introduces changes to the rules relating to the service tax. Among the provisions is a new list of services that are subject to the ISS:
New measures also provide a uniform rate of service tax, to be applied at 2% by all municipalities. No tax exemptions, incentives or other measures can be introduced by any municipality that would effectively provide for a lower rate of service tax.
Municipalities are being allowed one year from 30 December 2016, during which time they must amend their laws to reflect the standard 2% rate of ISS. Municipalities also must amend their local laws to reflect the new ISS rules for streaming and advertising services.
Read a January 2017 report prepared by the KPMG member firm in Brazil
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.