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Foreign Sites to Face More Taxes in Brazil

08/23/2013 - 10h14

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NATUZA NERY
RENATA AGOSTINI
FROM BRASILIA

Foreign internet companies operating in Brazil will have to pay more taxes. Under government request, the regulatory agencies Anatel (telecommunications) and Ancine (film) will have four months to develop a taxation model and notify companies such as Google, Facebook, Apple and Netflix.

According to what Folha learned, the expectation is that the change will take place in early 2014.

Minister Paulo Bernardo (Communications), who had defended tax equality from these type of activities, related to Cable TV subscription, asked agencies to commission a taxation model. Then, the model will be sent to Federal Revenue, responsible for collecting the payments.

He argues that companies like Google, Facebook, Apple and Netflix are selling and advertising services in the country, but contributing to taxes abroad, not here.

According to the Minister, 25% of the package price for Cable TV, for example, must be for taxes.

"Looking at this particular business model, you can see the beauty in it. But people doing business here ask themselves: why do I pay taxes and they do not?", questioned Bernardo. "Suppose there are two supermarkets at a corner, one pays taxes and the other does not. The one paying taxes will go broke. The imbalance is brutal. The activities are similar and must be treated equally."

Bernardo avoided making estimates on the increase in tax revenue before the agencies define how taxes will be calculated and knowing which taxes will be included. He also did not give a time frame for when it will start.

Most internet companies have offices in Brazil. The minister, however, said sales with international credit cards are not taxed. He mentioned, for instance, the purchase of a newspaper in the online Apple store, where payment is made directly in dollars.

Translated by SIMONE PALMA

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