Short answer. For the first time, Brazil’s consumption-tax reform reaches foreign digital suppliers that sell into Brazil. Under EC 132/2023 and LC 214/2025, a non-resident providing SaaS, streaming, apps, online platforms or other digital services to Brazilian customers must register for CBS/IBS and collect the tax on those sales — on a destination basis. Marketplaces and platforms can be made liable for the collection, and where no one registers, the payment/financial system can withhold the tax at settlement. 2026 is a test year; real collection ramps from 2027. If you sell digital services into Brazil from abroad, this is a new registration-and-collection obligation, not a distant reform.
Why foreign suppliers are in scope now
Brazil’s old consumption taxes were origin-heavy and hard to apply to a company with no local presence. The reform’s new dual VAT — CBS (federal) and IBS (states/municipalities) — is destination-based: the tax belongs where the customer is. That single design choice is what pulls non-resident digital suppliers into the net, aligning Brazil with the global “digital VAT” model. See Is There VAT in Brazil? IBS and CBS Explained. [Source: EC 132/2023; Lei Complementar 214/2025 — Planalto]
Who this hits
The obligation targets non-resident suppliers of digital goods and services to customers in Brazil — for example:
- SaaS and cloud software, digital subscriptions;
- streaming (video, audio, games) and app stores;
- online platforms and marketplaces intermediating sales into Brazil;
- other electronically supplied services consumed in Brazil.
Platform liability matters: where a marketplace or platform intermediates the sale, the reform can place the collection duty on the platform rather than the underlying supplier. [Source: Lei Complementar 214/2025 — Planalto]
B2C vs B2B — the split that decides who pays
The mechanics differ by customer type:
- Selling to consumers (B2C): the foreign supplier (or the platform) is expected to register and charge CBS/IBS on the sale.
- Selling to a Brazilian business (B2B): the Brazilian customer is generally able to account for the tax on the import of the service (a reverse-charge logic), and — because IBS/CBS are non-cumulative — take it as a credit.
Getting the B2C/B2B characterization right is the core compliance decision, and the detailed procedure is still being set in regulation — confirm the current registration route for your model. [Source: Lei Complementar 214/2025 — Planalto; Receita Federal / CGIBS]
The collection backstop: split payment
Brazil is not relying on voluntary compliance alone. Through split payment, the tax portion of a transaction can be peeled off at financial settlement and routed to the authorities — so if a non-resident supplier or platform does not register and collect, the payment system can withhold the CBS/IBS. For foreign suppliers this changes the calculus: non-compliance does not mean the tax is not collected — it means you lose control of how. See Split Payment in Brazil. [Source: Lei Complementar 214/2025 — Planalto]
The timeline
Alongside the wider IBS/CBS transition:
- 2026 — test year. Symbolic test rates (CBS 0.9% / IBS 0.1%) reported on invoices for informational purposes; no real collection if the accessory obligations are met. Invoice fields for IBS/CBS became mandatory during 2026 — systems must be ready.
- 2027 — collection begins. CBS starts being charged; non-resident registration and collection become financially real.
- 2029–2033 — full phase-in as IBS ramps and ICMS/ISS wind down.
Use 2026 to get registration, invoicing and tax determination working — before the exposure becomes financial in 2027. [Source: Lei Complementar 214/2025 — Planalto; CGIBS]
How this differs from the old ISS question
If you sold software or SaaS into Brazil before, your Brazilian customer dealt with IRRF + CIDE on the cross-border payment and, domestically, ISS applied — see Taxation of Software and SaaS in Brazil. The reform adds a new layer on top: the CBS/IBS you, the foreign supplier, may now have to charge and remit. It is a shift from “the tax is the Brazilian buyer’s problem” to “the non-resident supplier is in the compliance chain.”
Practical takeaway
If you supply digital services into Brazil from abroad:
- Assume you are in scope — the destination principle brings non-resident digital suppliers in.
- Map B2C vs B2B — it decides whether you register and charge, or the Brazilian buyer accounts for it.
- Check platform liability — if you sell through a marketplace, the collection duty may sit with the platform.
- Be operationally ready in 2026 — invoicing fields and registration before 2027 turns exposure financial.
- Confirm the current procedure — the non-resident registration mechanics are still being detailed; verify before you rely on a specific route.
FAQ
Do foreign companies have to charge CBS/IBS on sales to Brazil? Yes, for digital supplies to Brazilian customers. Under EC 132/2023 and LC 214/2025, non-resident digital suppliers must register for and collect CBS/IBS on a destination basis; platforms can be made liable instead.
When do the CBS/IBS rules for non-resident digital suppliers start? 2026 is a test year (informational reporting); real collection begins in 2027, with full phase-in by 2033.
What if a foreign supplier does not register? Brazil’s split-payment mechanism lets the payment/financial system withhold the CBS/IBS at settlement, so the tax is still collected — the supplier just loses control of the process.
Is a sale to a Brazilian business treated the same as to a consumer? No. For B2C the foreign supplier or platform generally charges the tax; for B2B the Brazilian business can typically account for it (reverse charge) and take a credit, since IBS/CBS are non-cumulative.
Does this replace the old IRRF/CIDE/ISS on software? It adds to the picture. The reform folds ISS into IBS/CBS over the transition and introduces the new CBS/IBS collection duty for non-resident suppliers, on top of any income-tax withholding on the payment.
📚 Related: Is There VAT in Brazil? IBS and CBS Explained and Split Payment in Brazil.
Sources
Official sources reviewed for this brief: the constitutional reform (Emenda Constitucional 132/2023 — Planalto) and the complementary law that regulates IBS/CBS, including the treatment of imports of goods and services and non-resident suppliers (Lei Complementar 214/2025 — Planalto), read together with the implementation guidance of the Comitê Gestor do IBS (CGIBS) and Receita Federal.