The digital ecosystem will be heavily impacted by the tax reform on consumption.
The scope of taxable transactions and the estimated standard rate applicable to the new taxes are some of the most sensitive aspects, requiring special attention from startups, software companies, marketplaces, and investors operating in this environment.
In a sector driven by innovation and often narrow margins, the upcoming changes will directly influence pricing, financial sustainability, and even the design of the business model itself.
To guide the strategic planning of technology companies during the transition, we have listed 5 points that deserve attention:
1. Unification Taxes and Expansion of the Tax Base: With the tax reform, two new taxes are introduced into the system, CBS (Contribution on Goods and Services) and IBS (Tax on Goods and Services), which will replace PIS, COFINS, ICMS, and ISS. All transactions involving goods and services will be taxed by CBS and IBS, with goods being defined as all movable or immovable property, tangible or intangible, including rights, and services as all other transactions.
2. Inclusion of Digital Assets in Taxation: The legislator has provided for the incidence of the new taxes on all transactions, fully encompassing the taxation of digital assets. The result: transactions that today are not taxed by ICMS or ISS will become subject to IBS and CBS.
3. Potential Increase in Tax Burden: Published estimates indicate that the combined reference rate for IBS and CBS may be around 28% on the price of the good or service. This represents a highly impactful increase. For example, a company taxed under the presumed profit regime that provides services subject to ISS is currently taxed at 5.65% or 8.65% (sum of PIS/Cofins and ISS, depending on the municipality). That same company, after the tax reform, will be taxed at approximately 28%.
4. Limited Possibility of Tax Credits: One of the principles of the tax reform is full non-cumulativity. Thus, every credit generated in the previous transaction will be deducted from the tax due in the subsequent one. Non-cumulativity is undoubtedly beneficial to the taxpayer, as it results in a lower tax base and, consequently, a lower amount of tax to be paid. However, in the technology sector, the main input – labor – is not subject to IBS and CBS, and therefore does not generate credits for subsequent transactions. Thus, even with the of full non-cumulativity, this fact alone will not benefit the sector.
5. Joint Liability of Digital Platforms: With the reform, the liability of platforms has been expanded and may impact the take rate. The legislator has established joint liability in substitution of the foreign supplier and alongside the domestic supplier, if the latter is a taxpayer (even if not registered) or does not record the transaction in a tax document. Since this is not subsidiary but joint liability, companies will have to create verification to avoid undesired exposure to liability.
The technology sector, characterized by innovative, scalable, and often hybrid business models, becomes one of the most affected with the transition to IBS and CBS. The tax reform will reshape the way companies operate, price, and scale their products. Therefore, this is the time to anticipate adjustments by reviewing revenue models, contracts, pricing, and compliance systems. Taking action in advance is not just advisable; it is decisive to protect margins and ensure the sustainability of the business in the new tax environment.
