MISSING LINK TO DIGITAL INTANGIBLES ON THE BRAZILIAN TAX REFORM

Abstract

The Brazilian tax reform, drafted at the proposition of constitutional amendment n. 45/2019, establishes a value added tax. This paper draws a brief panorama of the proposition, to access its ability to tax digital intangibles, such as software, apps or streaming services. Firstly, the name given to the new tax, IBS - Imposto de Bens e Servicos, which stands for Goods and Services Tax in Portuguese, is criticized. In fact, calling the tax "IBS" can leave a loophole for digital services, as shown in the paper. Secondly, there is no provision on the Brazilian tax reform addressing cross-border consumption of digital services. The reform needs to be further developed on this topic. In brief, the paper makes short comments on the suitability of the Brazilian tax reform to the particularities of digital products, focusing on two main aspects: the name given to the new Brazilian VAT, and the need to develop the legal framework to tax digital intangibles"™ imports. Apparently, there are still some loose ends in the constitutional amendment proposition n. 45/2019.