Brazil: Impact of indirect tax reform on nonresident sellers and digital platforms

Unlike under the current regime, the new CBS/IBS regime requires nonresidents that carry out taxable operations that are sourced in Brazil to register for CBS/IBS and comply with the new taxes.

Scope

The CBS/IBS rules apply to nonresident persons that perform operations with a CBS/IBS‑relevant nexus to Brazil, including:

• Imports of goods into Brazil when the nonresident is the importer of record, promotes the entry of goods (i.e., specifically identified e-commerce transactions), or is designated as a responsible party under customs or special‑regime rules
• Cross‑border supplies of services (such as consulting, IT, cloud, technical, or maintenance services) rendered to Brazilian customers, to the extent the services are used, exploited, or consumed in Brazil
• Cross‑border supplies of intangibles and rights (e.g., software, licenses, trademarks, or know‑how) to Brazilian recipients, where the economic use occurs in Brazil
• Other taxable operations when Brazilian law or regulations explicitly attribute taxpayer or responsible‑party status to a nonresident

The rules do not distinguish between business-to-business (B2B) and business-to-consumer (B2C) transactions as nonresidents are always considered jointly and severally liable for the tax and should thus register.

Registration

Nonresident suppliers must obtain a Brazilian CNPJ (taxpayer number) with the specific identifier for nonresidents when they:

• Perform operations subject to IBS/CBS with a Brazilian nexus; or
• Are designated as responsible for IBS/CBS collection or payment (for example, in import or tax‑substitution situations).

Registration is required before the nonresident begins CBS/IBS‑relevant activities (such as promoting imports, issuing Brazilian electronic tax documents, or assuming responsibility for CBS/IBS). Nonresidents must keep CNPJ data updated and, where required, appoint a legal representative in Brazil to receive notices and interact with the tax authorities.

There is no registration threshold—i.e., the first taxable transaction for which a nonresident meets the above criteria results in a registration/collection obligation. Nonresidents may appoint a Brazilian fiscal representative to carry out their tax obligation (including e-invoicing).

Invoicing and documentation

Nonresident suppliers must comply with Brazilian e-invoicing and documentation standards, including:

• Issuing NF‑e (Nota Fiscal eletrônica) for goods and certain intangibles, linked to the import declaration (for example, Duimp), showing the transaction value, CBS/IBS calculation base, IBS/CBS amount due, and references to customs documentation.
• Issuing NFS‑e (Nota Fiscal de Serviços eletrônica) or equivalent for services, indicating the Brazilian portion of the service or intangible, the amount charged, and relevant references to foreign invoices and foreign‑exchange (FX) contracts.
• Maintaining tax and commercial records (contracts, invoices, import declarations, FX contracts, proof of payment, and other supporting documents) for the statutory retention period and providing them to Brazilian tax authorities upon request.
• Ensuring that information in documents and declarations is true, complete, and consistent, as omissions or inconsistencies may lead to assessments, interest, and penalties, and may broaden liability.

Collection through split payment

• Concept and scope: CBS/IBS is segregated at the time of financial settlement and remitted directly to the tax authorities, rather than being collected by the supplier and paid later.
•  When it applies: Electronic payment arrangements (e.g., card, Pix, and other electronic settlement rails), with phased implementation/expansion and relevance to cross-border/digital situations as well
• Who is responsible: Payment service providers / payment system operators perform the segregation/remittance; the supplier/platform remains responsible for any residual tax not covered by the split
• Split payment is only a collection mechanism and does not remove the supplier/taxpayer’s duties around registration (CNPJ), invoicing/e-docs, recordkeeping, and returns (with the non-resident needing to register directly or appoint a fiscal representative, depending on the case)

Liability

Nonresident suppliers generally share joint and several (solidary) liability with Brazilian counterparties for:

• Payment of CBS/IBS due on the transaction
• Any underpayments identified by the tax authorities
• Associated interest and penalties

If the nonresident is not enrolled as a taxpayer, CBS/IBS may be collected at the FX remittance stage by the financial institution processing the payment abroad. The Brazilian recipient remains responsible for paying any difference between CBS/IBS withheld at FX level and the CBS/IBS actually due, taking into account applicable exemptions or special regimes.

Brazilian tax authorities may recover the full amount of CBS/IBS, plus interest and penalties, from either the nonresident or the Brazilian party, irrespective of contractual allocation of tax responsibility or costs. General Brazilian tax‑law penalty provisions apply for failures such as non‑registration when required, non‑issuance or incorrect issuance of electronic invoices, and late or insufficient payment of CBS/IBS.

Implementation timeline

The regulations are effective from their date of publication, with certain provisions scheduled to take effect from August 1, 2026 (e.g., registration and invoicing), and January 1, 2027 (e.g., collection), with full implementation only completed by 2033.

KPMG observation

The new IBS/CBS rules materially increase the Brazilian tax footprint for nonresident sellers by imposing registration, e‑invoicing, and joint and several liability from the first taxable transaction, with no B2B/B2C distinction or registration threshold. Given the interaction of CNPJ registration, Brazilian‑standard NF‑e/NFS‑e, split payment, and possible FX‑stage withholding, nonresident businesses may need to map Brazilian‑sourced flows early and adapt enterprise resource planning (ERP) and billing systems when required. 

Scope

The platform framework applies to digital platforms that intermediate transactions between suppliers and purchasers and that control at least one essential element of the transaction (such as billing, payment, terms and conditions, or delivery).

The rules cover:

• Intermediated supplies of goods and services (including digital services and content) where the acquirer/recipient is in Brazil
• Operations involving both foreign and Brazilian suppliers
• Imports of goods (including low‑value international parcels) intermediated by platforms

Only narrowly defined activities fall outside the “digital platform” concept (for example, entities that exclusively provide internet access, licensed payment services, or certain advertising/comparison services without remuneration tied to actual sales). Mixed‑activity operators can still be treated as platforms if they perform qualifying intermediation functions.

Marketplace/platform liability rules

The regulations introduce specific CBS/IBS liability rules for platforms, differentiated by whether the supplier is foreign or Brazilian, and coupled with safe‑harbor mechanisms:

• Foreign supplier scenario
  • When a platform intermediates a transaction in which the supplier is not resident or not established in Brazil, the platform may be treated as a tax substitute in relation to CBS/IBS.
  • In this case, the platform becomes responsible for CBS/IBS and is jointly liable with the Brazilian purchaser for the tax due on operations it intermediates.
• Brazilian supplier scenario
  • When the supplier is in Brazil, the platform is generally not the primary CBS/IBS taxpayer. However, it becomes jointly liable with the Brazilian supplier if:
    • It fails to report the required information on intermediated operations;
    • The supplier fails to issue a tax invoice, or
    • The transaction is not properly recorded on a tax invoice.
  • The CBS/IBS treatment for the platform’s potential debt follows the tax regime applicable to the supplier: if the supplier is under a favored regime (e.g., Simples Nacional), that regime applies; otherwise, the standard CBS/IBS regime applies.
• Safe harbor conditions
  • Platforms can avoid or significantly reduce CBS exposure if they cumulatively:
    • Enable and correctly operate split payment at the moment of financial settlement, with proper segregation and identification of CBS; and
    • Report all intermediated transactions and suppliers to the tax authorities (Receita Federal do Brasil (RFB) and the IBS Steering Committee (CGIBS)) as required.

Registration

All qualifying digital platforms, including those domiciled abroad, must register and obtain a CNPJ (taxpayer number) before starting activities that fall within the CBS/IBS scope. Platforms must keep registration data updated and observe deadlines for communicating changes (such as corporate events or termination of activities).

If a nonresident digital platform is not enrolled as a taxpayer, CBS/IBS may be collected at the foreign‑exchange (FX) remittance stage by the financial institution processing the payment abroad. The Brazilian recipient remains responsible for paying any difference between IBS/CBS withheld at FX level and the CBS/IBS actually due, taking into account applicable exemptions or special regimes.

Reporting and data‑sharing

Platforms are subject to extensive reporting and data‑sharing obligations:

• Transaction‑level reporting: Platforms must periodically report all transactions they intermediate and provide key information such as supplier identification, purchaser identification, transactional details, and tax details.  
• Split‑payment information: When acting as payment originator or otherwise involved in the financial settlement, platforms must transmit the information necessary to operate the split‑payment mechanism, including correct segregation of CBS/IBS and its allocation.
• National public platform for data exchange: Reporting and information exchange take place through a national public platform. Digital platforms must technically integrate with this environment and ensure accuracy, completeness, and timeliness of the data transmitted.

Optional regimes and operational flexibility

The framework allows certain optional arrangements, generally subject to the supplier’s consent:

• Invoice issuance and CBS/IBS collection on behalf of the supplier: Platforms may agree to issue tax invoices on behalf of suppliers and collect and pay CBS/IBS on intermediated operations, assuming related compliance obligations.
• Full tax substitution model: Platforms can opt to act as tax substitutes for specific operations, fully assuming invoice issuance, CBS/IBS calculation, and payment in substitution to the supplier.
• Curing missing invoices: When an invoice is missing or defective, the platform may regularize the situation within a defined period (for example, 30 days) by issuing or correcting documentation and paying the CBS/IBS, which can mitigate or remove certain penalties.
• Reference‑rate calculation: If supplier information is unavailable at the time of the transaction, the platform may compute CBS/IBS using reference rates, with later reconciliation once detailed data becomes available.

Imports and international parcels

The rules also cover cross‑border e‑commerce and imports of goods:

• Responsibility for CBS/IBS on imported goods: Platforms that intermediate imports, including sales of tangible goods in international parcels, may be responsible for CBS/IBS on these operations.
• Compliance programs for cross‑border e‑commerce: Specific compliance programs distinguish between platforms that adhere to enhanced obligations and those that do not.
• Adhering platforms collect CBS/IBS at the time of purchase (typically checkout), provide accurate customs and tax data upfront, and in return, can offer customers faster and less frictional customs clearance.
• In the case of non‑adhering platforms, postal or courier operators become responsible for import declaration and CBS/IBS collection, resulting imports are subject to greater operational friction, delays, and more intensive controls.

Collection through split payment

• Concept and scope: IBS/CBS is segregated at the time of financial settlement and remitted directly to the tax authorities, rather than being collected by the digital platform and paid later.
• When it applies: Electronic payment arrangements (e.g., card, Pix and other electronic settlement rails), with phased implementation/expansion and relevance to cross-border/digital situations as well.
• Who is responsible: Payment service providers and payment system operators perform the segregation/remittance; the digital platform remains responsible for any residual tax (when applicable) not covered by the split.
• Split payment is only a collection mechanism and does not remove the digital platform’s duties around registration (CNPJ), invoicing/e-docs, recordkeeping, and returns (with the nonresident needing to register directly or appoint a fiscal representative, depending on the case).

Implementation timeline

The regulations are effective from their date of publication, with certain provisions scheduled to take effect from August 1, 2026 (e.g., registration and invoicing), and January 1, 2027 (e.g., collection), with full implementation only completed by 2033.

KPMG observation

Brazil’s CBS/IBS digital platform rules make compliance a core strategic issue for domestic and foreign nonresidents that intermediate sales or imports into Brazil. Platforms must generally register for a CNPJ, integrate with the national data‑sharing environment, and support split payment, or risk higher/frictional CBS/IBS collection at reference rates. Liability is extensive—platforms can be tax substitutes for foreign suppliers and jointly liable with Brazilian suppliers when reporting or invoicing fails—though a strong safe harbor exists where split payment is correctly operated and full transaction‑level reporting is performed. Optional regimes and cross‑border parcel compliance programs offer flexibility but demand contract changes, supplier risk controls, and IT upgrades.