Notionally, electronic or digital services provided by foreign or resident provider to Brazilian consumers would be liable to the ICMS consumption tax - Imposto sobre Circulação de Mercadorias e Serviços de Tranporte Intermunicipal, Interestadual e de Comunicação.
ICMS is the federal-level tax which applies to the movement of goods, transportation, communication services and other general supplies of goods. The current tax level is between 7% and 25%.
However legal challenges have blocked its imposition. In April 2020 the federal court blocked the charge on electronic books. In April 2020, the State of Rio de Janeiro made digital goods subject to ICMS, with a collections role for financial intermediaries.
In 2018, the Brazilian Association of Information and Communication Technology Companies succeeded in blocking the Brazilian State Agreement imposing ICMS on downloads of games and streaming media.
